Looking to invest in MNC funds? Weigh risks properly before doing so

This category, however, tends to underperform when the market favours growth, high-beta or cyclical stocks

The MNC (multinational companies) category of thematic funds is currently in the spotlight as ICICI Prudential Mutual Fund has launched a new fund offer (NFO) for a fund in this category (NFO closes on June 11). Three funds—from Aditya Birla Sun Life, UTI and SBI—already exist in this category. Though the MNC category has been underperforming over the past year—the Nifty MNC Index has given a return of -6.21 per cent compared to the Nifty 50’s 13.11 per cent—these funds have sound long-term track records.  

One positive feature of thematic funds is that the MNCs included in their portfolios have