scorecardresearchThis thematic mutual funds category has posted average returns in past one year; Should you consider now?

This thematic mutual funds category has posted average returns in past one year; Should you consider now?

Updated: 28 Apr 2022, 07:40 AM IST
TL;DR.

There are only a handful of funds in the thematic (MNC) category. Most of them gave normal returns in the past one year

In past three months, the returns given by MNC thematic funds were in the negative territory, as per Value Research data.

In past three months, the returns given by MNC thematic funds were in the negative territory, as per Value Research data.

Thematic MNC mutual funds invest predominantly in multinational companies such as Alphabet, Netflix, P&G, Honeywell Automation, Bayer CropScience, Fortis, Gillette, Bata India, among others. These funds enable investors to generate long term capital appreciation by investing primarily in equity of multinational companies.

These funds are believed to be one of the riskiest. Despite the fact that these funds are more diversified in comparison to sectoral funds, they still carry a considerable risk.

As a matter of fact, the returns posted by these funds were not exceptional. In the past three months, the returns given by these funds were in negative territory, as per the Value Research data. Regardless of their returns in the immediate past, long-term returns were not impressive either.

In the past one year, these funds, as a category, gave a return of 13.20 percent. The three-year returns were 11.22 percent and five-year returns were even lower at 9.74 percent, as per Value Research data.

Returns given by Thematic (MNC) mutual funds 

Period            Returns (%)
1 month          0.80
3 months         -3.51
1 year            13.30
3 years         11.22
5 years            9.74

(Source: Value Research)

 

Investible universe of MNC funds: The investment options among MNC funds are few and far between. There are only four thematic (MNC) funds.

The first one is Aditya Birla Sun life MNC Direct Fund whose major investments are made in companies such as Honeywell Automation, Glaxosmithkline, Pfizer, P&G, Bayer CropScience, Fortis, Gilette, Bata India, ICRA and Kansai Nerolac Paints, among others.

The second one is ICICI Prudential MNC Fund which has key investments in Maruti Suzuki. United Breweries, Ambuja Cements, Cummins India, HCL Tech among others.

The third one is SBI Magnum Global Fund which has key allocations in companies such as Alphabet, Netflix, P&G, Grindwell, Maruti Suzuki, Divi's Labs, SKF India, Schaeffler India and United Breweries, Microsoft, Hindustan Unilever, Nestle, Page Industries, Abott India, among others.

Finally, there is UTI MNC Direct which has made key allocations in Mphasis, Maruti Suzuki, Nestle India, Hindustan Unilever, Honeywell Automation, United Spirits, Ambuja Cements, P&G, Grindwell Norton and Cummins India, among others.

Returns given by MNC funds in past one year

Mutual Fund name                                                1-year-returns (%) Return since inception (%)
Aditya Birla Sun Life MNC Direct                                                          5.9515.71
ICICI Prudential MNC Fund                                     23.1124.7
SBI Magnum Global Direct fund                                   13.9514.66
UTI MNC Fund                                     14.6915.87

(Source: Value Research & AMCs' portals; Returns as on April 26, 2022)

As we can see, the maximum return of 23.11 percent was posted by ICICI Prudential MNC Fund. It was followed by UTI MNC fund and SBI Magnum Global Fund which posted 14.69 percent and 13.95 percent, respectively. At the same time, the least returns were posted by Aditya Birla Sun Life MNC Direct which were 5.95 percent.

However, the cumulative returns since inception followed a slightly different trajectory. Although ICICI Prudential gave the maximum returns since inception, the low performing fund i.e., Aditya Birla Sun Life MNC Fund gave a high return of 15.71 percent despite underperforming in past one year.

Similarly, other two mutual funds gave a reasonably good return i.e., between 14.5 to 16 percent since inception.

First Published: 28 Apr 2022, 07:40 AM IST