The Kotak MNC Fund Review

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The Kotak MNC Fund Review

Introduction

The Kotak MNC Fund, launched via a New Fund Offer (NFO) from October 7–21, 2024, is a thematic, open-ended equity mutual fund centered on multinational companies (MNCs). With units priced at ₹10 during the NFO, it was open to investors with a minimum investment of ₹100 and a 0.5% exit load if redeemed within 90 days.

This review delves into the fund’s strategy, portfolio, performance to date, pros & cons, comparison with peers, and whether it is worth adding to your investment mix.

 

Investment Objective & Strategy

  • Objective: Generate long-term capital growth through predominantly MNCs listed in India—companies having over 50% foreign revenue or ownership .

  • Theme Rationale: MNCs tend to have strong global brands, R&D muscle, technological edges, and superior management—often reflecting stability .

  • Asset Mix: 80–100% in MNC equities; up to 20% in non-MNC equity and up to 20% in debt/money-market instruments; possibly 0–10% in REITs/InvITs.

  • Flexi-cap, Bottom-up & GARP Approach: Thematic fund stocks are chosen using flexible market-cap criteria, bottom-up research, and Growth-at-Reasonable-Price model.

  • Fund Managers: Equity team comprises Harsha Upadhyaya (CIO‑Equity) and Dhananjay Tikariha (erstwhile healthcare manager), with Abhishek Bisen managing debt investments.

The Kotak MNC Fund Review

Portfolio Allocation (as of June 2025)

Based on direct-growth plan data:

  • Equity: ~97%

    • Large-cap: ~45%

    • Mid-cap: ~26%

    • Small-cap: ~27%

  • Other Assets (debt/cash): ~3%

  • Top Holdings:

    • Maruti Suzuki (~7.35%)

    • Britannia (~7.3%)

    • HUL (~6%)

    • United Spirits (~3.8%)

  • Sector Allocation:

    • Consumer Staples ~22%

    • Healthcare ~19%

    • Capital Goods ~16%

    • Automobiles ~14%

Performance Review (Direct Growth)

A. Since Inception (Oct 7, 2024 to July 18, 2025)

  • NAV: ₹10.34 

  • CAGR (since inception): ~3.18% 

  • Trailing Returns:

    • 1 Month: 3.72% (cat avg 3.85%)

    • 3 Months: 11.6% (vs 10%)

    • 6 Months: 7.28% (vs 5.64%)

B. Benchmark Comparison

  • Direct Plan CAGR since inception: 3.39% vs Nifty 50 TRI 3.59% and Nifty MNC TRI 0.60%

  • Regular Plan (Oct 2024 – Jun 2025): 2.3% 

Insights:

  • Slightly behind broad market (Nifty 50 TRI), but ahead of MNC benchmark, thanks to stock selection.

  • Early performance is encouraging—especially in recent months where volatility has favored MNC-focused picks.

Strengths

  • Compelling Theme Exposure: MNCs bring global quality, brand leadership, and innovation advantages.

  • Strong Early Momentum: Outperforming peers in 3–6‑month period, indicating effective asset selection.

  • Competitive Expense Ratio: Direct plan cost at ~0.56% is attractive.

  • Experienced Management: Guided by seasoned professionals with proven track records in thematic and equity funds.

Risks & Limitations

  1. Short Track Record: Fund is under a year old; data on 1–5‑year performance is unavailable.

  2. Thematic Risk: Heavy concentration in MNCs and select sectors can lead to volatility during sector rotations.

  3. Exit Load: 0.5% if withdrawn within 90 days—discourages short-term trading.

  4. Benchmark Underperformance: Currently trails Nifty 50 TRI, though broader markets have unusually outperformed MNCs recently.

Peer Comparison

  • Expense ratio (~0.56%) undercuts peers like ICICI (1.05%) and SBI (1.22%).

  • Trailing 6‑month return (7.3%) beats category average of those competitors.

  • Long-running MNC funds like ICICI/SBI/UTI/Aditya Birla show ~14–16% CAGR over 3–5 years —a benchmark this fund may aim to match.

The Kotak MNC Fund Review

Who Should Invest?

Consider adding Kotak MNC Fund if you:

  • Believe in MNC growth drivers in the Indian market (brands, exports, tech).

  • Have a 5+ year horizon and high risk tolerance—ideal for thematic satellite exposure.

  • Want a cost-effective MNC thematic play (vs pricier peers).

Final Verdict

The Kotak MNC Fund is a strong contender in the emerging cohort of MNC-themed mutual funds. Backed by Kotak’s AMC strength and guided by experienced managers, the fund offers cost-efficient, discretionary access to globalised Indian businesses. Early returns are positive — outperforming MNC benchmark and rival funds in the 3–6 month timeframe.

Yet, the fund’s infancy means caution is warranted. Investors should pair it with a diversified core equity portfolio and commit for at least 3–5 years to realise its full potential. If you’re bullish on MNCs’ long-term prospects, it makes a compelling satellite allocation. For conservative investors or those seeking broader diversification, traditional large-/multi-cap funds remain preferable.

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