HDFC MNC Fund – New Fooling Offer?

HDFC Bilateral Fund has spoken a New Fund Offer – HDFC MNC Fund – a thematic fund benchmarked to the Nifty MNC Index.

As per the index factsheet misogynist on NSE, the Nifty MNC Alphabetize comprises 30 listed companies on National Stock Exchange (NSE) in which the foreign promoter shareholding is over 50%.

HDFC MNC Fund’s Scheme Information Document moreover suggests that its universe of stocks will have this eligibility criteria based on shareholding. Additionally, the fund can invest 20% of its portfolio in other stocks as well.

Well, what’s different?

What does the Nifty MNC alphabetize have?

Let’s first squint at the alphabetize itself and get an idea of what could be a likely portfolio of the HDFC MNC Fund.

Check out the sectoral spread of the index. What’s amiss?

The biggest difference Nifty MNC Alphabetize has in unrelatedness with, say, Nifty 50 – a broader market index, is the literal sparsity of Financial Services, which forms a zillion of the latter.

Source: Nifty 50 Alphabetize Factsheet

Here are the MNC alphabetize top holdings.

Source: Nifty MNC Alphabetize Factsheet

Here’s the same for Nifty 50

Source: Nifty MNC Alphabetize Factsheet

What do other MNC funds have in their portfolio?

Why just the index, let’s moreover squint at the other similar existing funds.

This is ICICI Pru MNC Fund’s top 10 holdings.

Source: ICICI Pru MNC Fund Factsheet

Below is Aditya Birla SL MNC Fund’s Top 10 holdings

Source: Adita Birla SL Bilateral Fund Website – a lot of mid/small cap bias

Here’s UTI MNC Fund’s Top 10 holdings

Thematic funds, as per SEBI, have to pinion to minimum 80% of the holdings as per the specified theme. 20% leeway is provided for other stocks.

Why? They say the reason is diversification. We all know the real reason is to find ways to write-up the benchmark and/or other funds.

Should you invest in HDFC MNC Fund?

With a large fund universe with HDFC MF, I am not sure we need flipside urgently managed fund from it.

On that note, why plane have an urgently managed MNC fund. HDFC MF once has dozens of funds doing the same.

If at all, this was a good endangerment to have a passive option based on the Nifty MNC index.

The alphabetize once has rules. The stock universe is limited. A low forfeit option would have made unconfined sense.

Not that anyone needs ‘one increasingly fund’, but that, at least in my view, would be the right thing to do.

So for this New Fooling Offer, you can requite a total miss.