Motilal Oswal Innovation Opportunities Fund

The Motilal Oswal Innovation Opportunities Fund has delivered a 1-year SIP XIRR of 9.11%, which is below the category average of 14.10% for the same period. Over the longer term, the fund's lump-sum CAGR has consistently outperformed the NIFTY 50 benchmark, with a 1-year CAGR of 17.34% versus -2.90% for the benchmark, and a 3-year CAGR of 13.98% versus 2.32%. The fund has generated positive alpha across all time horizons, ranging from 2.31% (15-year) to 20.99% (1-year).

The fund has experienced a maximum drawdown of -19.42%, with a drawdown duration of 153 days and a recovery period of 76 days, indicating moderate downside risk. The average drawdown is -3.75%, and there has been only one drawdown event exceeding 10%, suggesting relatively contained volatility. The 1-year Calmar ratio of 0.70 indicates that the fund's return relative to its maximum drawdown is moderate, and its downside capture ratio of 86.55% (1-year) shows it loses less than the benchmark during market declines.

The fund holds a concentrated portfolio of 24 stocks, with the top 10 holdings accounting for approximately 41.4% of the NAV. The largest sector exposure is Electrical Equipment at 13.0%, followed by Consumer Durables and Capital Markets at 7.1% each, indicating a thematic tilt towards innovation and industrial growth. Top holdings include Emmvee Photovoltaic Power (5.31%), CG Power and Industrial Solutions (4.51%), and Bharat Heavy Electricals (4.33%), reflecting a focus on power and electrical equipment companies.

The fund's 1-year SIP XIRR of 9.11% is significantly below the category average of 14.10%, indicating underperformance relative to peers in the recent period. However, the fund has shown strong long-term performance with a 3-year CAGR of 13.98% versus the benchmark's 2.32%, and it has consistently delivered positive alpha across all time frames. The fund's upside capture ratio of 112.9% and downside capture of 82.98% (3-year) suggest it participates more in market upswings while protecting on the downside, which is a favorable characteristic for a thematic fund.

This fund is suitable for investors with a high risk tolerance and a long-term investment horizon of at least 5-7 years, given its thematic concentration and potential for higher volatility. It is best suited for those who believe in the growth potential of innovation-driven sectors such as electrical equipment, power, and capital markets, and who can withstand short-term underperformance relative to the category. Investors should be aware that the fund's recent 1-year XIRR has lagged its category, so patience and a focus on long-term alpha generation are essential.

• Consistent positive alpha over all time horizons, with a 1-year alpha of 20.99% and a 3-year alpha of 11.74% versus the NIFTY 50.
• Strong downside protection, with a downside capture ratio of 86.55% (1-year) and 82.98% (3-year), meaning it loses less than the benchmark in falling markets.
• High upside participation, with an upside capture ratio of 113.97% (1-year) and 112.9% (3-year), allowing investors to benefit from market rallies.

• The fund's 1-year SIP XIRR of 9.11% is well below the category average of 14.10%, indicating recent underperformance relative to peers.
• The portfolio is highly concentrated in a few sectors (Electrical Equipment at 13.0%) and top holdings, which could lead to increased volatility and sector-specific risks.