Kotak MF just launched an MNC fund: Is the NFO worth tapping into? | Personal Finance

“The Kotak MNC Fund focuses on investing in multinational companies known for their strong global brand presence, advanced operational and technological advantages, exceptional management quality, and financial robustness. These companies span various sectors and have significant international business exposure. The fund offers investors a diversified portfolio, leveraging the long-term growth potential of these well-established global corporations,” the company said in a statement.

The fund will be managed by Harsha Upadhyaya and Dhananjay Tikariha.

The fund will identify companies with the potential for sustainable growth at reasonable valuations, leveraging insights from a robust research team and framework to ensure the

best opportunities are leveraged across market caps and sectors.

The Kotak MNC Fund aims to generate long-term capital growth by investing in equity and equity-related securities of multinational companies.

The fund has the flexibility to invest across various market capitalizations, with exposure to large, mid, and small-cap companies.

Load structure: Exit Load is an amount which is paid by the investor to redeem the units from the scheme.

• Exit load: If units redeemed or switched out are in excess of the limit within 1 year from the date of allotment: 1%
• units are redeemed or switched out on or after 1 year from the date of allotment: NIL

How will the scheme allocate its assets?

“Multi-National Corporations lead the way with research, innovation, and technology. These companies excel across various geographies and have proven business models with strong moats. The Kotak MNC Fund aims to leverage the strengths of these Multinational Companies, offering investors access to market leaders across sectors, geographies, and market caps. With this fund, we aim to invest in companies that not only have strong global footprints but also demonstrate growth potential. We shall pursue the suitable options across market caps and sectors, ensuring we continue to deliver value to our investors,” said Nilesh Shah, Managing Director, KMAMC.

The investment scheme will be active in nature.

What is the investment strategy of Kotak MNC Fund?

The Kotak MNC Thematic Fund focuses on investing in companies that align with MNC theme. Our approach to the MNC theme includes four key categories:

MNCs are companies Incorporated/Registered In India which include:

1. Subsidiaries of Foreign Company: The foreign promoters account for more than 50% of the shareholding/voting rights/equity capital; or

2. JV of Foreign Company: Any Indian company that is a Joint Venture (JV) with a foreign company where the Foreign Co will have more than 26% of shareholding/voting rights/equity capital; or

3. Indian Multinational Companies: Any Indian company having more than 50% of its turnover/revenue/assets from regions outside India; or

4. Trans National Companies: Any company which operates in multiple countries and derives more than 50 % of revenue from such regions or has more than 50 % of its assets in such regions. Such regions refer to as regions/countries other than the parent country (where the company is incorporated/registered).

The following are indicative list of sectors, as per the AMFI sector classification, are examples where such MNCs may operate:

• Automobile and Auto Components

• Capital Goods

• Chemicals

• Construction

• Construction Materials

• Consumer Durables

• Consumer Services

• Diversified

• Fast Moving Consumer Goods

• Financial Services

• Forest Materials

• Healthcare

• Information Technology

• Media, Entertainment & Publication

• Metals & Mining

• Oil, Gas & Consumable Fuels

• Power

• Realty

• Services

• Telecommunication

• Textiles

• Utilities

Owing to high concentration risk being a sectoral/thematic scheme, risk of capital loss is relatively high.

“Kotak MNC Fund is designed to tap into the potential of multinational companies that aim to consistently outperform through innovation and operational strengths. We believe that MNCs, with their global expertise and local insights, are well-positioned to benefit from evolving market dynamics. Our focus will be on creating a suitable portfolio that seeks not just growth but resilience, ensuring that we capture opportunities across different economic cycles,” said Harsha Upadhyaya, CIO & Fund Manager, KMAMC.

What are thematic funds?

Thematic funds focus on specific themes like renewable energy, manufacturing, transport and logistics, MNC etc., and invest in companies related to that theme.

Below are the reasons why investors might consider including

thematic funds in their portfolios:

1. Specialized Expertise: Thematic funds are often managed by teams with expertise in the thematic domain, allowing investors to tap into specialized knowledge and research.

2. Potential for Outperformance: The theme may outperform the broader market depending on the performance

and favorable economic environment.

However, the opposite can also be true, and thematic funds can underperform if their particular theme does not do well.

Will the fund have Market cap bias?

No, the fund will invest across market caps.

Can the scheme invest in IPOs as well?

Yes, the scheme may invest in companies at IPO stage if deemed appropriate.

What will be the Ideal investment horizon?

A long-term investment horizon could be considered as an ideal one for instance 5 years and above. One can invest

through a lump sum or SIP route in this fund.