Birla Sun Life MNC Fund and UTI Fund have returned 26 per cent and 23 per cent annually in the past five years.
These two schemes manage about Rs 750 crore (Rs 7.5 billion).
The best performing fund category, fast-moving consumer goods, returned 29 per cent annually in the same period.
The pharmaceuticals and information technology categories returned 27 per cent and 22 per cent, respectively, according to Value Research.
In this period, the Sensex returned 12 per cent annually.
What makes MNC funds different from others?
As the name suggests, their portfolio is loaded with pure MNC or joint venture stocks.
For instance, the top three holdings of UTI MNC Fund are Maruti Suzuki, Bosch and Eicher; all three are automobile and components companies.
Birla Sun Life’s MNC scheme has ICRA, ING Vyasa and Honeywell Automation -- two financials and one engineering firm.
HDFC Top 200, one the top performing funds, has State Bank of India, Infosys and ICICI Bank as top picks.
Mahesh Patil, co-chief investment officer at Birla Sun Life MF, says the biggest advantage of MNCs is their transparency in terms of management, cash flow, balance sheet and an absence of corporate governance issues.
“These funds are meant for those looking for less volatility and steady returns from their portfolio,” he adds.
The other advantage of these funds is that these don’t focus on any one
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