Motilal Oswal Mid Cap Fund

Motilal Oswal Mid Cap Fund has delivered strong SIP XIRR across horizons, with 22.75% over 1Y, 20.55% over 3Y, and 20.68% over 5Y, consistently ahead of category averages of 21.6%, 19.93%, and 19.38% respectively. Against the NIFTY Midcap 150, the fund has generated positive alpha over 3Y (5.15%), 5Y (7.18%), and 7Y (4.12%), with lump-sum CAGRs of 22.07%, 23.28%, and 24.93% beating the benchmark. The 1Y period is a notable exception, with a negative alpha of -8.05% and fund CAGR of just 1.96% versus the benchmark's 9.86%.

The fund shows a defensive risk profile relative to its benchmark, with beta below 1 across most periods (0.87-0.92) and downside capture consistently under 90% (e.g., 83.63% over 5Y), meaning it falls less than the index in weak markets. The maximum drawdown of -0.37% with a 32-day duration and 268-day recovery suggests limited recent peak-to-trough stress, though 8 drawdown events exceeding 10% indicate meaningful interim volatility over the longer history. Calmar ratios of roughly 0.52-0.60 across horizons reflect reasonable risk-adjusted returns given the mid-cap category's inherent volatility.

The portfolio is highly concentrated with only 26 total holdings, and the top 10 positions account for roughly 58% of NAV, led by Kalyan Jewellers (7.44%) and One 97 Communications (7.34%). Sector exposure is led by Finance (15.1%), IT-Software (12.5%), and Consumer Durables (11.0%), with meaningful allocations to newer-economy names such as fintech (9.3%) and telecom (9.1%). This concentrated, conviction-driven approach amplifies both upside potential and single-stock risk compared to more diversified mid-cap peers.

The fund has beaten category average SIP XIRR at every measured horizon, including 22.94% versus 19.29% over 7Y and 22.98% versus 19.41% over 10Y, demonstrating sustained outperformance rather than a short-term spike. Calendar year returns show strong consistency in favorable markets, with gains of 59.23% in 2024, 42.86% in 2023, and 56.41% in 2021, though losses in 2025 (-11.57%) and 2018 (-11.04%) highlight mid-cap cyclicality. Its combination of below-benchmark downside capture and above-category returns positions it among the stronger mid-cap performers.

This fund suits investors with a high risk tolerance and a horizon of at least 5-7 years, as mid-cap returns are volatile and the recent 1Y underperformance versus the benchmark illustrates the risk of short holding periods. It is best used as a satellite allocation within a diversified equity portfolio rather than a core holding, given its concentrated 26-stock portfolio. SIP investors seeking long-term wealth creation with above-category returns, and who can tolerate drawdowns exceeding 10% during market stress, are the ideal audience.

• Consistent outperformance versus category average SIP XIRR at all horizons, including 22.98% vs 19.41% over 10Y
• Favorable downside capture below 90% across most periods (e.g., 83.63% over 5Y) with positive alpha of 7.18% over 5Y
• Strong calendar-year performance in favorable markets, including 59.23% in 2024 and 56.41% in 2021

• Recent 1Y underperformance with negative alpha of -8.05% and fund CAGR of 1.96% versus the benchmark's 9.86%
• High portfolio concentration with only 26 holdings and top 10 positions comprising roughly 58% of NAV, raising single-stock risk