UTI MNC fund invests in multinationals companies- who derive a large part of their income from overseas operations or through international exports. Both UTI MNC and Aditya Birla Sun Life MNC have long been among the MNC-themed funds. More recently, SBI Magnum Global has aligned 100 percent with the subject, away from its first mid-cap focus with MNC bias. Such funds showed a high degree of stability in returns.
For example, during the last year of high volatility in equity markets, the UTI MNC fund direct growth delivered a healthy return, behind the tech- and consumer-themed funds. Both midcap small-cap funds and energy-themed funds have performed better over the past five years than MNC-themed funds. Over the past ten years, the UTI MNC fund direct growth has topped the chart, outperforming all fund categories, including mid- and small-cap funds.
These UTI MNC funds were consistently outperformers due to the quality of companies in their portfolios. Many of these firms have a technological edge over their peers and are strong global brands that give them a robust price cap. Many markets perform in cycles and have better return ratios.
UTI MNC fund direct growth stocks tend to be cash-rich companies that are less volatile when the market’s risk perception is high, enabling them to achieve optimal returns over the long term.
Also, UTI MNC funds make it less risky than other funds. UTI MNC funds are not limited to specific sectors. UTI MNC funds are more flexible than the regular sector or additional funds and are less volatile. They do not require the limits of active management needed by other funds.
Should investors consider adding UTI MNC funds to their portfolio?
UTI MNC funds follow a multi-cap strategy and investing across the trade spectrum. It can be argued that multi-cap funds often invest in certain multinationals, giving investors the necessary exposure.
UTI MNC funds can play the role of large-cap funds within the portfolio, taking into account the decline in return profile in this category. UTI MNC funds can provide a portfolio with flexibility in a volatile market. These can be an ideal replacement for large-cap funds (whose outperformance margins are decreasing) because there is also volatility in the large-cap.
Experts insist that it is essential to pay attention to the quality aspect of return in the hunt for better returns, and this is where a UTI MNC fund fits into investors’ portfolios.
The UTI MNC Fund mainly invests in MNC stocks in various sectors such as-
- Engineering etc
This fund provides much better returns as it does not have any investment in existing beaten-down sectors like commodities etc. That is mostly attributed to the lack of multinationals in those industries. The way in which multinationals can do under different market cycles remains to be noted. The diversification of MNC funds is showing limited agreement.