MNC funds: all five with 3 years trail the Nifty MNC

The question

An MNC fund is a thematic fund built on one idea: Indian-listed companies whose parent is a multinational tend to have strong brands, clean balance sheets and steady payouts. Like every sectoral or thematic fund, it must keep at least 80% of its money in its theme, and it sits in SEBI's sectoral/thematic category.

The index version of the idea has done well. Our look at the Nifty MNC against the Nifty PSE found the MNC index ahead of the Nifty 50 by about 2.5 points a year since 2012. So how have the funds that sell the theme done?

Seven funds, ₹17,518 crore

We took every active MNC fund with a Direct Growth plan, leaving out the two ETFs. Assets are AMFI's average for July to September 2026; expense ratios are the Direct plan's latest disclosure; returns are from NAVs to 9 October 2026 (8 October for ICICI Prudential, its latest NAV in our data), and a year or more is a yearly rate.

"Running since" for the three oldest is the start of our NAV records for their Regular plans, April 2006; their Direct plans began in January 2013. The index rows are total-return figures rebuilt from NSE's closing levels and daily dividend yields.

What stands out

Nobody beats the index over three years or more. All five funds with a three-year record trail the Nifty MNC TRI, by 3.4 to 7.6 points a year when each is compared with the index on its own NAV date, and all five also trail the broader Nifty 500 TRI. Over five years only ICICI Prudential MNC is ahead of the Nifty 500 (10.04% against 8.35% to its 8 October NAV), and none is ahead of the MNC index. Over ten years the three oldest funds made 7.73% to 10.84% a year against 12.98% for the index.

The passive version did better too. The Kotak Nifty MNC ETF, which simply holds the index, returned 11.67% a year over three years to 9 October, after its costs. It held only ₹47 crore in the quarter, against ₹17,518 crore in the active funds.

The last year is different. Over one year six of the seven funds beat the Nifty 500 TRI, and three beat the Nifty MNC: Kotak MNC at 16.25%, SBI MNC at 12.52% and ICICI Prudential MNC at 0.78% (to 8 October, when the index's one-year figure was 0.30%). The spread is 27 points, from Kotak's gain to Aditya Birla Sun Life's 11.17% loss.

SBI MNC is the giant. It holds 37% of the theme's money, about twice the next fund. It is also the only old fund with a positive year.

What they hold

On the funds' 30 September 2026 portfolios, six stocks appear in all seven:

Vedanta Aluminium Metal, United Spirits and Siemens are in six each. These are the multinational subsidiaries most investors picture when they hear "MNC", and the theme is not cheap: on 9 October the Nifty MNC's P/E was 34.3, against 19.27 for the Nifty 50, a ratio of 1.78. The Nifty MNC P/E page shows its daily history.

The two funds that did best over the year read the theme widely. SBI MNC's largest holding is Divi's Laboratories at 5.82%, and it also holds Sun Pharmaceutical, Navin Fluorine and Aether Industries. Kotak MNC's top four are MTAR Technologies, Indo-MIM, Acutaas Chemicals and Azad Engineering. These are Indian-promoted companies, many of them suppliers to global customers rather than subsidiaries of foreign parents. "MNC" in a fund's name does not fix what it may buy: each fund's offer document sets its own definition, and it is worth reading before you compare two of them.

How to read this

Costs do not explain the gap. The funds charge 0.90% to 1.89% a year on their Direct plans. The three-year gap to the index is 3.4 to 7.6 points, so most of it came from what the funds held, not from what they charged.

The recent leaders look different. The two best one-year funds hold many names outside the classic MNC list. Whatever drove their year, that makes them different products from the older funds, with different risks.

Fund houses keep launching. Four of the seven started in 2019 or later, three of them since 2023. The Kotak Mahindra and SBI fund-house pages list their other thematic funds.

What the numbers do not tell you

Trailing returns depend on their end date; the Nifty 500 TRI's three-year figure moved by 0.8 points between 8 and 9 October alone. The index rows are our reconstruction, not NSE's published TRI, and the ETF figure is the cleaner like-for-like comparison. Holdings are a month-end snapshot. Nothing here predicts how the theme will do next, and none of it is a recommendation to buy or sell any fund. If you are weighing a thematic fund against a diversified one, our look at whether sector and thematic funds reward the risk is a good next read, and the direct vs regular calculator shows what the plan choice costs over time.