Motilal Oswal Mid Cap Fund: Spots moats before the drawbridge comes up

Early moves in resilient midcaps turn into long-haul winners

Motilal Oswal Mid Cap Fund, launched in February 2014, has ranked in the top 30 percentile of the midcap fund category in the Crisil Mutual Fund Ranking (CMFR) for three straight quarters through March 2025. The fund has been managed by Niket Shah since July 2020 and Ajay Khandelwal since October 2024. Its month-end assets under management rose to ₹26,028 crore in March 2025, up from ₹2,641 crore in March 2022.

 

The fund aims to deliver long-term capital appreciation and steady income by investing in quality midcap companies with durable competitive advantages and clear growth visibility.

 

Trailing returns

 

The fund has outperformed its benchmark, the Nifty Midcap 150 TRI, across the one-, two-, three-, five-, and seven-year trailing periods. It has also stayed ahead of its peers (funds ranked in the midcap category in CMFR as of March 2025) across one-, two-, three-, five-, seven-, and 10-year horizons.

 

An investment of ₹10,000 made at the fund’s launch on February 24, 2014, would have grown to ₹1 lakh (an annualised return of 22.6 per cent) by June 12, 2025. In comparison, a similar investment in the midcap category would be worth ₹81,656 (22.15 per cent), and in the benchmark, ₹96,004 (20.41 per cent).

 

A systematic investment plan (SIP) of ₹10,000 every month over 10 years — totalling ₹12 lakh — would have grown to ₹38.25 lakh in the fund (22.12 per cent annualised return), compared with ₹36 lakh (20.99 per cent) in the benchmark, as of June 12, 2025. The fund has outperformed the benchmark in SIP performance over three-, five-, seven-, and 10-year periods. 

 

Portfolio analysis

 

The fund has maintained a high tilt towards midcaps over the past three years. On average, 68 per cent of the portfolio was allocated to midcap stocks, compared with 67.58 per cent for the category. Largecap and smallcap allocations averaged 15.42 per cent and 6.42 per cent, respectively, while the category averages stood at 13.79 per cent and 14.17 per cent. The fund’s exposure to both largecaps and midcaps was higher than that of its peers.

 

The portfolio spans 18 sectors, with top allocations to information technology (15.21 per cent), financial services (11.68 per cent), capital goods (11.38 per cent), automotive and auto components (11.16 per cent), and consumer durables (11.07 per cent).

 

During the review period, the fund invested in 99 stocks, with three held consistently. Key contributors included Eternal, Tube Investments of India, Persistent Systems, and CG Power and Industrial Solutions.