Motilal Oswal Fund: Year's Worst Performer, Decade's Long-Term Winner

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AuthorVihaan Mehta|Published at:
Motilal Oswal Fund: Year's Worst Performer, Decade's Long-Term Winner
Overview

Motilal Oswal Midcap Fund recorded an 11.82% loss over the past year, topping the midcap category's worst performers. Despite this short-term setback attributed to market correction and stock issues, the fund showcases remarkable long-term strength. It leads midcap peers with 28.9% CAGR over three years and 23.8% CAGR over five years, signaling its suitability for patient, high-risk tolerance investors.

Midcap Fund's Mixed Fortunes

Motilal Oswal Midcap Fund – Direct Plan – Growth has experienced a difficult twelve months, emerging as the biggest underperformer in the midcap fund category. It posted a return of negative 11.82%, trailing its peers and other funds managed by Motilal Oswal Mutual Fund.

Long-Term Strength Emerges

This short-term performance, however, obscures a robust medium-term track record. Data from the Financial Express Mutual Funds Screener reveals the fund as the top performer in the midcap space over three and five-year periods. It delivered a 28.9% CAGR over three years and 23.8% CAGR over five years, outperforming its benchmark, the NIFTY Midcap 150 TRI, across these durations and also on a 10-year horizon with a marginal edge.

Performance Versus Benchmark

Over one year, the fund's -11.82% return starkly contrasts with the NIFTY Midcap 150 TRI's +3.54% gain. However, longer periods tell a different story. For three years, the fund's 28.89% CAGR significantly outpaced the benchmark's 23.60%. The five-year CAGR stood at 23.75% against the benchmark's 20.82%, and over ten years, it posted 18.49% compared to 17.99%.

Fund Details and Risk Profile

Launched on February 24, 2014, this open-ended midcap equity fund manages ₹38,003 crore in assets under management as of November 30, 2025. Its direct plan carries an expense ratio of 0.74%. The fund is classified under 'Very High' risk, indicated by a standard deviation of 17.89% and a beta of 0.93, suggesting slightly less volatility than the benchmark. Its Sharpe ratio is 1.06 and Sortino ratio is 1.33.

Concentrated Portfolio Strategy

The fund employs a concentrated approach, with significant allocations to its top ten holdings. These include Persistent Systems (10.03%), Coforge (9.92%), Eternal (8.69%), Dixon Technologies (8.07%), and Kalyan Jewellers (7.98%). This strategy can amplify gains when conviction bets pay off but also heightens risk during market downturns.

Investor Suitability

This fund is best suited for investors with a long-term investment horizon of over five years and a high tolerance for risk and volatility. Those seeking stability or quick returns should consider other options.

Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.