UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 Lakh crore, the AMC is among the most trusted names in the mutual fund space. The UTI Mutual Fund offers products across asset classes.
UTI MNC Fund
Investment Objective
The scheme’s primary objective is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of multinational companies.
Investment Process
The fund manager will invest primarily in shares of multinational companies. A Multi-national company is a company where there is a shareholding of a multi-national parent or such company that forms part of Nifty MNC TRI or any other publicly available MNC Index.
Parameters such as cash flow generation, earnings growth prospects, valuation, market leadership, etc., along with the other relevant parameters from time to time, will be used to select stocks.
Portfolio composition
The fund allocates a minimum of 80% in equity and equity-related instruments of multi-national corporations or companies, with a risk ranging from medium to high.
A maximum of 20% will be allotted in Debt and Money Market instruments, including securitized debt. In addition, the fund may allocate a maximum of 10% in Units issued by REITs & InvITs.
Source: UTIMF
Performance Since Inception
A one-time investment of Rs. 10,000/- made at the time of the scheme launch, i.e., May 29, 1998, would now be valued at Rs. 3,27,624, whereas the benchmark (Nifty 500 TRI) would have fetched you Rs 2,00,438.
Date – May 29, 1998. Source: UTIMF
Fund Manager
Mr. Karthikraj Lakshmanan ably manages the fund. Mr. Karthikraj Lakshmanan is Senior VP and Fund Manager of equity at UTI AMC Ltd. He is a B.Com Graduate, Chartered Accountant, holds a post-graduate degree in Business management (PGDBM) from SPJIMR, Mumbai, and has Cleared CFA (CFAI, US).
He has a total work experience of around 17 years. Before joining UTI in July 2022, he worked as a Senior Fund Manager, at Equities with Baroda BNP Paribas Asset Management. He has previously worked with ICICI Bank, Goldman Sachs, and ICICI Prudential AMC.
Who Should Invest?
- Investors looking to diversify their core equity portfolio by adding exposure to quality MNC stocks.
- Investors looking for a market cap agnostic fund and willing to bear the short-term divergence in returns compared to the general indices.
- Investors are willing to increase the risk spectrum of their portfolio with exposure to a thematic portfolio philosophy.
Why Invest?
- The fund provides a differentiated portfolio of quality MNCs, typically not commonly held by pure diversified equity funds.
- The Fund endeavors to invest in companies with low financial leverage and has a high potential to lead pricing in their respective sector.
- The fund exhibits a long-term performance track record, outperforming the benchmark, with relatively lower volatility.
Horizon
- Ideal for investment with a time horizon of five years or above.
- Investment through a Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
The scheme primarily invests in stocks of multinational corporations (MNCs) operating in India. These companies have a significant presence and market share in India and are subsidiaries of global corporations.
It has generated a CAGR of over 15% since inception and has outperformed the benchmark. Hence this fund can be considered for long-term wealth creation with high risk.
Disclaimer:
This is not recommendation advice. All information in this blog is for educational purposes only.
