{"id":395,"date":"2019-06-03T11:36:17","date_gmt":"2019-06-03T11:36:17","guid":{"rendered":"http:\/\/blog.certifiedfinancialguardian.com\/?p=395"},"modified":"2019-06-03T12:46:16","modified_gmt":"2019-06-03T12:46:16","slug":"icici-prudential-mnc-fund-can-it-prove-to-be-a-wealth-multiplier","status":"publish","type":"post","link":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/06\/03\/icici-prudential-mnc-fund-can-it-prove-to-be-a-wealth-multiplier\/","title":{"rendered":"ICICI Prudential MNC Fund: Can It Prove To Be A Wealth Multiplier?"},"content":{"rendered":"\n<p>ICICI Prudential MNC fund is another open-ended equity thematic fund launched by <a href=\"https:\/\/www.personalfn.com\/fund\/icici-prudential-mutual-fund\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">ICICI Prudential Mutual Fund<\/a>.<\/p>\n\n\n\n<p><strong>What\nis a Thematic\/Sector Fund?<\/strong><\/p>\n\n\n\n<p>A thematic\/ sector fund aims to invest in\ncompanies that are unified with one specific theme or of that sector. For\nexample, a fund investing in housing theme would invest in sectors such as\nconstruction, banks, cement, steel, paints, sanitary ware, etc. that are\nrelated sectors that get a boost from demand in housing. <\/p>\n\n\n\n<p>Such funds are usually launched at a time when fund houses sense a growth potential of a certain sector or a cluster of sectors in the medium to long-term future.<\/p>\n\n\n\n<p>As\nper the current AMFI mandate, the investment in equity and equity related\ninstruments of a particular sector\/ theme should be minimum 80% of total\nassets.<\/p>\n\n\n\n<p>ICICI Prudential MNC Fund is one such\nthematic fund that aims to invest in equity and equity related instruments of multinational\ncompanies (MNC);<\/p>\n\n\n\n<ul><li>Companies incorporated within India\nhaving business operations spread across globe,<\/li><li>Foreign companies having\nbusiness operations in India,<\/li><li>And foreign companies that have\nbusiness spread globally but are not listed on the Indian Stock exchanges.<\/li><\/ul>\n\n\n\n<p>An MNC is sector and market cap agonistics.&nbsp; MNCs generally have a strong competitive advantage in terms of sustainability over a long term as it has good management, strong balance sheet with <a href=\"https:\/\/www.personalfn.com\/fns\/should-you-be-investing-in-offshore-funds?utm_source=equitymaster\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">global brand<\/a> presence. Due to good corporate governance, they exhibit better operational efficiency to maintain strong balance sheet and are stable during times of market volatility.<\/p>\n\n\n\n<p style=\"text-align:center\"><strong>Image\n1: <em>The MNC Advantage<\/em><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" width=\"915\" height=\"309\" src=\"http:\/\/blog.certifiedfinancialguardian.com\/wp-content\/uploads\/2019\/06\/fns-3-03-6-19.png\" alt=\"\" class=\"wp-image-400\" srcset=\"https:\/\/blog.certifiedfinancialguardian.com\/wp-content\/uploads\/2019\/06\/fns-3-03-6-19.png 915w, https:\/\/blog.certifiedfinancialguardian.com\/wp-content\/uploads\/2019\/06\/fns-3-03-6-19-300x101.png 300w, https:\/\/blog.certifiedfinancialguardian.com\/wp-content\/uploads\/2019\/06\/fns-3-03-6-19-768x259.png 768w\" sizes=\"(max-width: 915px) 100vw, 915px\" \/><\/figure>\n\n\n\n<p style=\"font-size:10px;text-align:center\">(Source: <a href=\"https:\/\/www.icicipruamc.com\/docs\/default-source\/default-document-library\/icici-prudential-mnc-fund---investor-presentation.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">ICICI Prudential MNC Fund Investor Presentation<\/a>)<\/p>\n\n\n\n<p>The fund\nhouse is of the view that since, MNCs are coupled with a suite of time-tested\nproducts &amp; services and are well positioned to benefit from growth\nprospects across the globe. Plus, they also demonstrate better use of capital\nallocation and hence managed to consistently deliver higher ROE, this will help\ninvestors in creating wealth over the long term.<\/p>\n\n\n\n<p>From a risk standpoint, given the <a href=\"https:\/\/www.personalfn.com\/fns\/essence-of-successful-investing?utm_source=equitymaster\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">portfolio allocation<\/a> is skewed heavily to equity IPMNCF is a high-risk contender and thus suitable only for investors who have a high-to-very high-risk appetite and an investment horizon of at least 5 years. <\/p>\n\n\n\n<p><strong>[Read<\/strong>: <a href=\"https:\/\/www.personalfn.com\/fns\/why-comparing-returns-to-risk-is-more-meaningful\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Why Comparing Returns to Risk Is More Meaningful!<\/a><strong>]<\/strong><\/p>\n\n\n\n<p>From a\ntax implication standpoint, IPMNCF will be classified as an <a href=\"https:\/\/www.personalfn.com\/guide\/all-about-equity-mutual-fund\" target=\"_blank\" rel=\"noreferrer noopener\">equity-oriented mutual\nfund scheme<\/a>.&nbsp;Hence, if\nredeemed within a holding period of one-year,&nbsp;Short Term Capital Gain Tax\n(STCG) tax @ 15% will apply. And if redeemed after a period of 1 year, the Long-Term\nCapital Gains (LTCG) in excess of Rs 1 lakh will be taxed @10%. <\/p>\n\n\n\n<p style=\"text-align:center\"><strong>Table 1:<em> NFO Details<\/em><\/strong><\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Type<\/strong>\n  <\/td><td>\n  An open-ended equity scheme \n  <\/td><td>\n  <strong>Category<\/strong>\n  <\/td><td>\n  Thematic (following MNC theme)\n  <\/td><\/tr><tr><td>\n  <strong>Investment Objective<\/strong>\n  <\/td><td colspan=\"3\">\n  To generate long term capital appreciation by investing\n  predominantly in equity and equity related securities within MNC space. <br><br>\n  However, there can be no assurance or guarantee that the\n  investment objective of the scheme would be achieved.\n  <\/td><\/tr><tr><td>\n  <strong>Min. Investment<\/strong>\n  <\/td><td>\n  Rs 5,000 and in multiples of Re 1 thereafter\n  <\/td><td>\n  <strong>Face Value<\/strong>\n  <\/td><td>\n  Rs 10 per unit\n  <\/td><\/tr><tr><td>\n  <strong>Plans&nbsp;<\/strong>\n  <\/td><td>\n  \u2022 Regular<br>\n  \u2022 Direct\n  <\/td><td>\n  <strong>Options<\/strong>\n  <\/td><td>\n  \u2022 Growth*<br>\n  \u2022 Dividend (Payout &amp; Reinvestment*)\n  <\/td><\/tr><tr><td>\n  <strong>Entry Load<\/strong>\n  <\/td><td>\n  Nil\n  <\/td><td>\n  <strong>Exit Load<\/strong>\n  <\/td><td>\n \u2022 1% of applicable Net Asset\n  Value &#8211; If the amount, sought to be redeemed or switch out is invested for a\n  period of upto twelve months from the date of allotment <br>\n\u2022 Nil &#8211; If the amount, sought\n  to be redeemed or switch out is invested for a period of more than twelve\n  months from the date of allotment\n  \n  <\/td><\/tr><tr><td>\n  <strong>Fund Manager<\/strong>\n  <\/td><td>\n  Mr Anish Tawakley and Mr Lalit Kumar\n  <\/td><td>\n  <strong>Benchmark Index<\/strong>\n  <\/td><td>\n  NIFTY MNC TRI\n  <\/td><\/tr><tr><td>\n  <strong>Issue Opens<\/strong>\n  <\/td><td>\n  May 28, 2019\n  <\/td><td>\n  <strong>Issue Closes:<\/strong>\n  <\/td><td>\n  June 11, 2019\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p style=\"font-size:10px;text-align:center\">(Source:<a> <\/a><a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"http:\/\/portal.amfiindia.com\/spages\/11969.pdf\" target=\"_blank\">Scheme Information Document<\/a>)<\/p>\n\n\n\n<p><strong>How\nwill the Scheme<\/strong> <strong>allocate its assets?<\/strong><\/p>\n\n\n\n<p>Under normal circumstances, the scheme\u2019s <a href=\"https:\/\/www.personalfn.com\/fns\/why-you-should-not-ignore-personalized-asset-allocation-while-investing\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">asset allocation<\/a> or asset distribution weight will be as under.<\/p>\n\n\n\n<p style=\"text-align:center\"><strong>Table 2:&nbsp;<em>IPMNCF&#8217;s\nAsset Allocation<\/em><\/strong><\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td rowspan=\"2\">\n  <strong>Instruments<\/strong>\n  <\/td>\n<td colspan=\"2\">\n  <strong>Indicative\n  Allocation (% of Total Assets)<\/strong>\n  <\/td>\n<td rowspan=\"2\">\n  <strong>Risk Profile<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>Maximum<\/strong>\n  <\/td><td>\n  <strong>Minimum<\/strong>\n  <\/td><\/tr><tr><td>\n  Equity and equity related securities within MNC space\n  <\/td><td>\n  100\n  <\/td><td>\n  80\n  <\/td><td>\n  High\n  <\/td><\/tr><tr><td>\n  Other equity and equity related instruments\n  <\/td><td>\n  20\n  <\/td><td>\n  0\n  <\/td><td>\n  Medium to High\n  <\/td><\/tr><tr><td>\n  Debt, Units of debt Mutual Fund schemes and Money market\n  instruments\n  <\/td><td>\n  20\n  <\/td><td>\n  0\n  <\/td><td>\n  Low to Medium\n  <\/td><\/tr><tr><td>\n  Gold\/Gold ETF\/Units issued by REITs\/ InvITs such\n  other asset classes as may be permitted by SEBI from time to time (subject to\n  applicable SEBI limits)\n  <\/td><td>\n  20\n  <\/td><td>\n  0\n  <\/td><td>\n  Medium to High\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p style=\"font-size:10px\">The Scheme may also take exposure to: <\/p>\n\n\n\n<ul style=\"font-family: Arial; font-size: 10px;\"><li style=\"font-family: Arial; font-size: 10px;\">Derivative instruments to the extent of 100% of net\nassets.&nbsp; <\/li><li style=\"font-family: Arial; font-size: 10px;\">ADR\/GDR\/ Foreign Securities to the extent of 50% of net\nassets. Investment in ADR\/GDR\/Foreign Securities would be as per SEBI Circular\ndated September 26, 2007, as may be amended from time to time. <\/li><li style=\"font-family: Arial; font-size: 10px;\">Securitised debt upto 50% of debt portfolio.<\/li><li style=\"font-family: Arial; font-size: 10px;\">Stock lending up to 20% of net assets. <\/li><\/ul>\n\n\n\n<p style=\"font-size:10px\">The Cumulative Gross Exposure across\nvarious asset classes will not exceed 100% of the Net Assets of the Scheme.<\/p>\n\n\n\n<p style=\"font-size:10px;text-align:center\">(Source: <a href=\"http:\/\/portal.amfiindia.com\/spages\/11969.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Scheme Information Document<\/a>)<\/p>\n\n\n\n<p><strong>What will be the Investment Strategy?<\/strong><\/p>\n\n\n\n<p>The Scheme will follow a <a href=\"https:\/\/www.personalfn.com\/fns\/two-approaches-to-portfolio-construction-followed-by-fund-managers\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">bottom-up approach<\/a> to stock-picking and primarily choose companies across sectors\/market capitalization which falls under the criteria of MNC. MNCs will be those:<\/p>\n\n\n\n<ol><li>Foreign promoters account for\nmore than 25% of the shareholding or <\/li><li>Any company that is a\nsubsidiary, Joint Venture (JV), associate of a foreign company or <\/li><li>Any Indian company having more\nthan 50% of its turnover\/ revenue from regions outside India or <\/li><li>Any company (including foreign\ncompanies) which operates in multiple countries.<\/li><\/ol>\n\n\n\n<p>The Scheme may also take exposure in any\nother company which in view of the fund manager can be classified as MNC. The\nscheme can also invest in equity &amp; equity related securities of other\ncompanies as stated in the asset allocation table. <\/p>\n\n\n\n<p>The scheme will be following a blend\napproach, a combination of value and growth, to build the portfolio. The scheme\nintends to invest in stocks across large cap, midcap, small cap. <\/p>\n\n\n\n<p>The Scheme may also use various derivatives\nand hedging products from time to time, as would be available and permitted by\nSEBI, to protect the value of the portfolio and enhance Unit holders\u2019 interest.\nThe Scheme may also invest in depository receipts including American Depository\nReceipts (ADRs) and Global Depository Receipts (GDRs).<\/p>\n\n\n\n<p><strong>Who will manage the ICICI Prudential MNC\nFund?<\/strong><\/p>\n\n\n\n<p>The ICICI Prudential MNC Fund will be managed by Mr Anish Tawakley and Mr Lalit Kumar. And the overseas investments of the Scheme will be\nmanaged by Ms. Priyanka Khandelwal.<\/p>\n\n\n\n<p><strong>Mr Anish Tawakley<\/strong> is the Head of research and fund manager at ICICI Prudential AMC.\nHe completed his B Tech (Mechanical Engineering) from IIT Delhi followed by PGDM\n(MBA) from IIM Bangalore. Mr Tawakley has over 15 years of experience in equity\nresearch. Prior to joining ICICI Prudential Asset Management Company Limited in\n2016, He worked with Barclays India for Equity Research for 3.5 years, and\nbefore that he worked with Credit Suisse India &#8211; Equity research &#8211; Indian\nfinancial services sector for a short time. He also worked for almost 8 years\nin Alliance Bernstein (UK) based in London for Equity Research &#8211; Financial\nServices stocks in Emerging Markets. <\/p>\n\n\n\n<p>Currently, some of the schemes that Mr Tawakley manages at the fund house include <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.personalfn.com\/factsheet\/icici-pru-bluechip-fund-g-direct-plan\" target=\"_blank\">ICICI Prudential Bluechip Fund<\/a>, <a href=\"https:\/\/www.personalfn.com\/factsheet\/icici-pru-manufacture-in-india-fund-g-direct-plan\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">ICICI Prudential Manufacture in India Fund<\/a> and <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.personalfn.com\/factsheet\/icici-pru-value-fund-13-d-direct-plan\" target=\"_blank\">ICICI Prudential Value Fund \u2013 Series 13<\/a>.<\/p>\n\n\n\n<p><strong>Mr\nLalit Kumar<\/strong> is a Senior Manager at ICICI Prudential\nAsset Management Company Limited. He has to his credit a B. Tech degree in\nElectrical Engineering from IIT Kanpur, an MBA (in Finance) from IIM Kolkata\nand is a CFA. &nbsp;<\/p>\n\n\n\n<p>Mr Kumar has rich experience in equity\nresearch.&nbsp;Before joining the fund house, he was an Equity Research Analyst\nat East Bridge Advisors Pvt Ltd. and at Nomura Financial Advisory &amp;\nSecurities. Prior to that he was an Intern at Merrill Lynch for a brief period\nand he has also worked as a Senior Design Engineer at Cypress Semiconductors.<\/p>\n\n\n\n<p>At <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.personalfn.com\/fund\/ICICI-Prudential-Mutual-Fund\" target=\"_blank\">ICICI Prudential Mutual Fund<\/a>, Mr Kumar co-fund manages <a href=\"https:\/\/www.personalfn.com\/factsheet\/icici-pru-value-fund-13-d-direct-plan\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">ICICI Prudential Value Fund \u2013 Series 13<\/a>.<\/p>\n\n\n\n<p><strong>Ms Priyanka Khandelwal<\/strong>, as mentioned earlier, will manage the overseas investments of the Scheme. She joined ICICI Prudential Mutual Fund in October 2014 and has to her credit a bachelor\u2019s degree in commerce (B. Com), plus is a Chartered Accountant and Company Secretary by qualification. At present, Ms Khandelwal also manages <a href=\"https:\/\/www.personalfn.com\/factsheet\/icici-pru-us-bluechip-equity-fund-g-direct-plan\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">ICICI Prudential US Bluechip Equity Fund<\/a> and <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.personalfn.com\/factsheet\/icici-pru-global-stable-equity-fund-g-direct-plan\" target=\"_blank\">ICICI Prudential Global Stable Equity Fund<\/a>. <\/p>\n\n\n\n<p><strong>The outlook for ICICI Prudential MNC\nFund:<\/strong><\/p>\n\n\n\n<p>ICICI Prudential MNC Fund will aim to tap potential gains for long term by\ninvesting predominantly in equity and equity related securities within MNC\nspace from India and globe. It will focus on creating a high quality &amp;\ndiversified portfolio using a bottom-up approach of stock selection and will be\na market cap and sector agnostic. Given the asset allocation, the fortune of\nthe fund will be closely hinged onto the performance of the stocks held in the\nportfolio.<\/p>\n\n\n\n<p>Currently, the equity markets have corrected, and <a href=\"https:\/\/www.personalfn.com\/fns\/how-will-modi-20-drive-the-performance-of-your-mutual-fund-portfolio\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">the 2019 Lok Sabha election<\/a> results declared pushed the markets upward. But the corporate earnings haven&#8217;t been very encouraging; the Nifty 500 profit-to-GDP ratio is at a 15-year low. Plus, there are governance issues with a few companies. Earnings don\u2019t justify the valuations and the average P\/E of Nifty trails to 28.9x. If the economic growth does not pick up from here on, it may hurt the bottom line of companies. Corporate earnings haven&#8217;t been very encouraging for all companies in a respective market capitalisation segment. &nbsp;<\/p>\n\n\n\n<p>Besides some of the key factors that will influence Indian equities is GDP growth (which seems to have lost momentum of late), how international crude oil prices move, the inflation trajectory,&nbsp;&nbsp; union budget 2019 announcements and increased MSP (Minimum Support Price) on fiscal deficit.&nbsp; <\/p>\n\n\n\n<p>Besides even global macroeconomic factors; the US-china trade war,\nBrexit, changing regulatory goalposts in ecommerce and teething problems that\nhamper smooth implementation of new laws can impact the equities. <\/p>\n\n\n\n<p>Hence, it will not be an easy task for wealth creation and volatility\nwill be obvious.&nbsp; How the fund managers\nspots opportunities in these challenges while constructing the portfolio\nremains to be seen. Thus, the fortune of the IPMNCF will be closely linked to\nhow well the fund manager and his team assess the scenarios and risk management\nmeasures they adopt. <\/p>\n\n\n\n<p>[<strong>Read:&nbsp;<\/strong><a href=\"https:\/\/www.personalfn.com\/mutual-fund\/sips-to-invest-in-2019\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Best SIPs To Invest in 2019<\/a>] <\/p>\n","protected":false},"excerpt":{"rendered":"<p>ICICI Prudential MNC fund is another open-ended equity thematic fund launched by ICICI Prudential Mutual Fund. What is a Thematic\/Sector Fund? A thematic\/ sector fund aims to invest in companies that are unified with one specific theme or of that sector. For example, a fund investing in housing theme would invest in sectors such as&hellip;<\/p>\n","protected":false},"author":4,"featured_media":403,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/395"}],"collection":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/comments?post=395"}],"version-history":[{"count":9,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/395\/revisions"}],"predecessor-version":[{"id":409,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/395\/revisions\/409"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media\/403"}],"wp:attachment":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media?parent=395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/categories?post=395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/tags?post=395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}