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?
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.
Listed below are the preferred MNC Index holdings.
Here is the same for Nifty 50
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.
Below are Prime 10 holdings of the Aditya Birla SL MNC Fund
Here are the UTI MNC Fund’s Prime 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
