ICICI Prudential Mutual’s MNC Fund, which will mostly invest in listed Indian arms of global companies, is the fourth fund in the category.
While most multinational companies (MNC) are known for their strong global brands, technical edge, higher return ratios, existing schemes in the category have underperformed the Nifty in the last one year. Investment advisors recommend against putting lumpsum allocations in the fund because of pricey valuations.
Those convinced about long-term prospects of MNCs could opt for a systematic investment plan (SIP).
The New Fund Offer (NFO), which is currently open for subscription, closes on June 11. It will be managed by Anish Tawakley and Lalit Kumar with the overseas investments managed by Priyanka Khandelwal.
ICICI Prudential MNC Fund aims to differentiate itself from existing schemes in the category by investing at least 65% of its corpus in Indian MNC stocks and other MNCs listed in India with the option to invest the balance 35% overseas into global MNC companies.
Investors tend to like MNC companies, which are usually better managed than their Indian peers. MNC companies have strong balance sheets with no significant debt, allowing financial freedom to fund operations, meet obligations and withstand negative surprises.
However MNC funds have been laggards in the stock markets in the last one year. AB Sunlife MNC Fund returned 1%, UTI MNC Fund lost 2.69% and SBI Magnum Global lost -0.57%. As compared to this the Nifty 50 gained 11%.
“Many MNC companies are in the consumption space which is expected to do well in the long term, given India’s growing economy. Investors could use the SIP route to build a stable long term portfolio through this fund, ”says Rupesh Bhansali, head (distribution), GEPL Capital ..
Aditya Birla SL MNC Fund, SBI Magnum Global Fund and UTI MNC Fund manage assets worth ₹3,690 crore, ₹3,583 crore and ₹2,110 crore respectively.