Money Saving

HDFC MNC Fund – New hoax offer?

HDFC Mutual Fund has launched a New Fund Provider, HDFC MNC Fund, a Nifty MNC Index-linked thematic fund.

According to the index fact sheet available on NSE, the Nifty MNC index includes 30 companies listed on the National Stock Exchange (NSE) in which the foreign promoter’s equity interest exceeds 50%.

The HDFC MNC Fund’s Scheme Data Doc also means that its universe of shares could have these eligibility standards based primarily on shareholding. Also, the fund can invest 20% of its portfolio in different stocks effectively.

Alright, what’s completely different?

What does the Nifty MNC index have?

Let’s first take a look at the index itself and think about what could very well be a possible portfolio for the HDFC MNC Fund.

Try the sector spread of the index. What’s happening?

Nifty MNC Index - Sector RepresentationNifty MNC Index - Sector Representation

The most important difference that the Nifty MNC Index has compared to, for example, the Nifty 50, a broader market index, is the literal absence of financial providers, which accounts for the majority of the latter.

Nifty 50 Index - Sector RepresentationNifty 50 Index - Sector Representation
Supply: Nifty 50 index fact sheet

Listed below are the preferred MNC Index holdings.

Nifty MNC Index - Top 10 StocksNifty MNC Index - Top 10 Stocks
Supply: Nifty MNC Index Fact Sheet

Here is the same for Nifty 50

Nifty 50 Index - Principal ComponentsNifty 50 Index - Principal Components
Supply: Nifty MNC Index Fact Sheet

What do the different MNC funds have in their portfolio?

Why just the index, let’s also take a look at the other current related funds.

Those are the top 10 holdings of ICICI Pru MNC Fund.

ICICI Pru MNC Fund: Top 10 HoldingsICICI Pru MNC Fund: Top 10 Holdings
Supply: ICICI Pru MNC Fund Fact Sheet

Below are Prime 10 holdings of the Aditya Birla SL MNC Fund

ABSL MNC Fund: Top 10 HoldingsABSL MNC Fund: Top 10 Holdings
Supply: Adita Birla SL Mutual Fund Website – Lots of Mid/Small Cap Bias

Here are the UTI MNC Fund’s Prime 10 Holdings

UTI MNC Fund: Top 10 HoldingsUTI MNC Fund: Top 10 Holdings

Thematic funds, according to SEBI, must stick to a minimum of 80% of the participations according to the theme described. A 20% leeway is provided for different actions.

Because? They say the reason is diversification. Everyone knows that the real purpose is to find ways to beat the benchmark and/or other funds.

Should you spend money in the HDFC MNC Fund?

With a large universe of funds with HDFC MF, I’m not sure we’d like another actively managed fund from him.

On that notice, why even have an actively managed MNC fund? HDFC MF already has dozens of funds doing the same.

If anything, this was a good opportunity to have a passive option based on the Nifty MNC index.

The index already has guidelines. The inventory universe is outlawed. A low-priced choice would have made a lot of sense.

Not that anyone wants ‘yet another fund’, but that, at least in my opinion, might be the best thing to do.

So for this new hoax offer, you can provide a complete miss.

If you’re someone who thinks that MNC funds offer better top-notch quality and efficiency and therefore want the theme, then you’ve gotten other funds with a follow-up document.

More information: John Bogle’s 8 Guidelines for Building Your Mutual Fund Portfolio

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