MNCs Survive through the TANK period!

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By Rahul Pithadia – Multinational companies are those which has existence in the in the domestic country and also has its various branches all over the world thereby making their financial health strong. During the tough times they can compensate their losses with the gains made through its branches all over the world. Below is the example of a top MNC Fund of 2016.

 UTI MNC Fund is an open ended diversified equity fund that aims to create value by investing predominantly in equities of large cap and mid cap multinational corporations (MNCs) diverse across sectors. The fund has maintained equity exposure of 89.94

UTI MNC FUND – GROWTH Daily Chart:

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Portfolio analysis: The fund is concentrated at the stock as well as sector level. As the average exposure to top five stocks is approximately 30% and given below are the sectoral allocation.

Sector-allocation-and-top-holdings-20160115

Risk Profile: The risk is high as the fund is concentrated in a few stocks but at the same time when the next major bull trend resumes in Indian markets this fund can give above average returns. Investors looking forward for higher returns with higher risk can consider this fund for investments in staggered fashion or through SIP route.

Technical perspective: As shown in the aforementioned daily chart of UTI MNC Fund (G), since early 2014, NAV of the respective Mutual Fund has skyrocketed from the levels of 70 to the highs of 155, offering above average returns to its investors. As per wave perspective, intermediate wave 3 of intermediate wave III is currently ongoing. However, prices recently broke the channel support and showed sideways action which suggest that wave 3 has completed its course at the recent peak and now wave 4 is completing its corrective course.

Investment Rationale: Looking at the Elliott wave structure and technical picture of broader market there is possibility that the under performance of this fund should complete around 140 levels. Fresh entry can be made in this fund on sustainable move above 165 levels.

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