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An open-ended equity scheme following multinational company (MNC) theme

HDFC Asset Management Company Limited (HDFC AMC), investment manager to HDFC Mutual Fund (HDFC MF), one of India’s leading mutual fund houses has announced the launch of HDFC MNC Fund, which will invest predominantly in MNCs (Multi-National Companies) across sectors and market cap segment.   HDFC MNC Fund will invest at least 80% of Net Assets in equity and equity related instruments of Multi-National Companies (MNCs). For the purpose of this fund MNCs shall consist of 

-          Companies having foreign promoter shareholding >50%

-          Companies that form part of Nifty MNC index

MNCs normally exhibit certain key characteristics to justify their inclusion in an investor’s portfolio:

Superior Corporate Governance: MNCs have a track record of superior corporate governance and financial reporting standards. This has reflected in longevity of MNCs in India.

Strong Brand Identity: Brands of MNCs have a strong recall across multiple geographies and noteworthy presence in everyday life

Superior Technological Capabilities: Superior R&D of MNCs (especially through foreign listed parents) results in superior technological capabilities. Focus on innovation results in resilience against disruption.

Robust Financial Position: MNCs have robust growth with higher profitability, higher return ratios, stronger balance sheets with lower debt.

Track record of resilience: MNCs have attractive return track record with low volatility and better resilience during market downswings.

The fund is suitable for investors who aim to generate long-term capital appreciation by investing pre-dominantly in equity instruments of MNCs, with an investment horizon of at least 3 years. Further,the low overlap of MNCs with broader market creates potential diversification benefit for investors.

The NFO opened on February 17 2023 and closes on March 03, 2023.

Mr. Rahul Baijal, who has over 20 years of experience in Fund Management and equity research, will manage the Scheme.  Commenting on HDFC MNC Fund, Rahul Baijal, who is the Fund Manager of this Scheme, said, " MNCs have historically had good corporate governance, strong business models and attractive financial metrics. Also, they have had an attractive wealth creation track record over longer time frames. Further, they have exhibited better resilience during market downswings. This, along with potential diversification benefits arising out of a low overlap with broader market, does create an investment case for investing in MNCs through HDFC MNC Fund “

Commenting on the launch, Mr. Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Co. Ltd. said “In a world full of uncertainty and volatility, portfolio diversification is critical for investors. In view of this, we have launched the HDFC MNC Fund, which adds to our wide range of offerings; and could provide investors with diversification benefits, owing to potentially low overlap with broader market”   

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