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.

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

Short Track Record: Fund is under a year old; data on 1–5‑year performance is unavailable.
Thematic Risk: Heavy concentration in MNCs and select sectors can lead to volatility during sector rotations.
Exit Load: 0.5% if withdrawn within 90 days—discourages short-term trading.
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.

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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