By Ashish Kyal –
Mutual funds with a wide concentration on the Multinational Corporations are MNC funds. These theme based funds has done exceedingly well in past few years, as well as the top sector funds.
As the name suggest, MNC fund’s portfolio is loaded with pure MNC or Joint Venture stocks. The biggest advantage of investing in MNC is their Transparency in terms of management, Cash flows, Balance sheet and absences of Corporate Governance issues. MNCs were also assumed to be generally better and more professionally managed, clean corporate governance, and have easier access to newer technologies and additional capital. These types of funds are made for the investor looking for less Volatility and Steady Returns from their portfolio.
The other advantage of these funds is that it doesn’t focus on any one sector and they are less risky as compared to sector funds. As previously told, investing for long is always beneficial for the investor. An Investor should invest in MNC funds for time horizon 3 to 5years for better rate of return. As these funds can perform in both bullish market as well as bearish market, experts believe there is more upside to these. One can take 20 percent exposure in these types of funds which should a cushion to the riskiest investments in other asset clases.
MNC funds can boost of stocks with mostly sound fundamentals, thought high price. Although they are thematic funds, they are more diversified than sector funds for one simple reason – they hold basket of sectors. In addition, they hold a basket of defensive and growth funds giving them an option to choose sector based on market condition.
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