HDFC MNC Fund – New Fooling Supply?


HDFC Mutual Fund has introduced a New Fund Supply – HDFC MNC Fund – a thematic fund benchmarked to the Nifty MNC Index.

As per the index factsheet obtainable on NSE, the Nifty MNC Index contains 30 listed corporations on Nationwide Inventory Alternate (NSE) by which the overseas promoter shareholding is over 50%.

HDFC MNC Fund’s Scheme Data Doc additionally means that its universe of shares can have this eligibility standards primarily based on shareholding. Moreover, the fund can make investments 20% of its portfolio in different shares as nicely.

Effectively, what’s completely different?

What does the Nifty MNC index have?

Let’s first take a look at the index itself and get an thought of what may very well be a possible portfolio of the HDFC MNC Fund.

Try the sectoral unfold of the index. What’s amiss?

Nifty MNC Index - Sectoral Representation

The largest distinction Nifty MNC Index has in distinction with, say, Nifty 50 – a broader market index, is the literal absence of Monetary Providers, which types a bulk of the latter.

Nifty 50 Index - Sectoral Representation
Supply: Nifty 50 Index Factsheet

Listed below are the MNC index high holdings.

Nifty MNC Index - Top 10 stocks
Supply: Nifty MNC Index Factsheet

Right here’s the identical for Nifty 50

Nifty 50 Index - Top constituents
Supply: Nifty MNC Index Factsheet

What do different MNC funds have of their portfolio?

Why simply the index, let’s additionally take a look at the opposite related current funds.

That is ICICI Pru MNC Fund’s high 10 holdings.

ICICI Pru MNC Fund - Top 10 Holdings
Supply: ICICI Pru MNC Fund Factsheet

Beneath is Aditya Birla SL MNC Fund’s High 10 holdings

ABSL MNC Fund - Top 10 holdings
Supply: Adita Birla SL Mutual Fund Web site – loads of mid/small cap bias

Right here’s UTI MNC Fund’s High 10 holdings

UTI MNC Fund - Top 10 holdings

Thematic funds, as per SEBI, have to stick to minimal 80% of the holdings as per the outlined theme. 20% leeway is offered for different shares.

Why? They are saying the reason being diversification. Everyone knows the true motive is to seek out methods to beat the benchmark and/or different funds.

Must you put money into HDFC MNC Fund?

With a big fund universe with HDFC MF, I’m not certain we want one other actively managed fund from it.

On that be aware, why even have an actively managed MNC fund. HDFC MF already has dozens of funds doing the identical.

If in any respect, this was an excellent probability to have a passive possibility primarily based on the Nifty MNC index.

The index already has guidelines. The inventory universe is restricted. A low value possibility would have made nice sense.

Not that anybody wants ‘another fund’, however that, at the very least in my opinion, could be the suitable factor to do.

So for this New Fooling Supply, you can provide a complete miss.

In case you are somebody who thinks that MNC funds provide higher high quality in addition to respectable efficiency and thus desire the theme, then you could have different funds with a observe report.

Additional Learn: John Bogle’s 8 guidelines to construct your mutual fund portfolio