Motilal Oswal Midcap Fund: High concentration, consistent performance

Motilal Oswal Midcap Fund, launched in February 2014, has consistently ranked in the top 30 percentile of the midcap fund category in the CRISIL Mutual Fund Ranking (CMFR) for three consecutive quarters through March 2024.

The fund has been managed by Niket Shah since July 2020, and Rakesh Shetty and Ankush Sood since November 2022.

Its month-end assets under management more than quadrupled to Rs 8,986 crore in March 2024, from Rs 1,895 crore in March 2021.

The fund aims for long-term capital appreciation by investing in quality midcap companies with sustainable competitive advantages and significant growth potential.
 

Trailing returns

The fund has consistently outperformed the benchmark (National Stock Exchange Nifty Midcap 150 TRI) over one-year, two-year, three-year, five-year, and 10-year trailing periods, as well as its peers (funds ranked in the midcap category in CMFR in March 2024) over one-year, two-year, three-year, five-year, seven-year, and 10-year trailing periods.

An investment of Rs 10,000 in the fund on February 24, 2014, the inception date of the fund, would have grown to Rs 80,573 (an annualised return of 20.67 per cent) by May 9, 2024.

In comparison, the same investment in the category would have grown to Rs 67,131 (an annualised return of 20.5 per cent), and in the benchmark to Rs 80,956 (22.73 per cent).

A systematic investment plan (SIP) is a disciplined investment approach offered by mutual funds, where one can invest a fixed amount at regular intervals.

A monthly investment of Rs 10,000 over the past 10 years, totalling Rs 12 lakh, in the fund would have grown to Rs 36.15 lakh (an annualised return of 21.1 per cent) compared to Rs 35.75 lakh (20.9 per cent) for the benchmark as of May 9, 2024.

Overall, the fund has outperformed the benchmark in SIP periods of one, three, five, seven, and 10 years.

 

Portfolio analysis

Over the past three years, the fund has maintained a predominantly higher exposure to midcap stocks, with allocations to largecap and smallcap stocks averaging 12.67 per cent and 11.17 per cent, respectively, while midcap stocks averaged 68.42 per cent.

The portfolio is diversified across 19 sectors, with the highest average allocation to financial services (17.36 per cent), followed by automotive (12.21 per cent), construction (11.25 per cent), industrial manufacturing (9.02 per cent), and information technology (8.79 per cent).

During the analysed period, the fund held exposure to 91 stocks and consistently held four key contributing stocks to the portfolio: CG Power and Industrial Solutions, Tube Investments of India, Persistent Systems, and Indian Railway Catering and Tourism Corporation.