Motilal Oswal Multicap Fund: Strong performance in its first year since launch

Motilal Oswal Multicap Fund has completed 1 year since launch of the scheme. As per SEBI's mandate multicap funds must invest minimum 25% of their assets in each of the three market cap segments viz. large cap, midcap and small cap. Though Motilal Oswal Multicap Fund is just 1 year old, its performance and investment strategy has caught our attention. In this article we will review this fund.

*As on 31^st May 2025

Why Multicap in current market scenario?

• Multicap strategy can exploit a much larger and more diverse opportunity set spread across large, mid and small cap stocks. The fund manager can find investment opportunities in industries that are unique to particular market cap segments e.g. non ferrous metals and telecom (large cap), realty, tyres and capital goods (midcap), shipping, casting / forging, stock / commodity broking (small cap).


• The reforms implemented by the Government especially in the areas of manufacturing (Atmanirbhar Bharat), infrastructure, digitalization, tax reforms etc will benefit companies across all three cap market cap segments. The changing global supply chain dynamics e.g. China + 1, will benefit companies across all three market cap segments.


• The chart below shows the 5 year rolling returns of Nifty 500 Multicap 50:25:25 TRI versus Nifty 500 TRI over last 15 years (01.01.2010 to 31.05.2025). Though multicap strategy can be slightly more volatile, average rolling returns of the multicap index is higher than Nifty 500 TRI. Furthermore, at the same time the percentage of 15%+ CAGR returns instances of Multicap significantly higher (nearly 57%) compared to Nifty 500 TRI. Multicap strategy offers superior risk return trade off over sufficiently long investment tenures.
  
  

  

  Source: National Stock Exchange, Advisorkhoj Research, as on 31^st May 2025.



• Valuations have moderated compared to peak valuations across all market cap segments (see the chart below).
  
  

  

  Source: National Stock Exchange, Advisorkhoj Research, as on 31^st May 2025.



• Though there are near term global risk factors due to geopolitical and global trade uncertainties, the medium to long term outlook for Indian equities is bright. India has become the 4^th largest economy and is expected to become the 3^rd largest economy by 2030 (as per IMF's forecasts). Narrowing fiscal deficit, relatively benign inflation, weakening US dollar, supported by RBI's accommodative monetary policy can provide tailwind to equities once we get past the short term risk factors. In the medium to long term, India is likely to benefit from changing global supply chain dynamics (e.g. China + 1) and domestic consumption fuelled economic growth.

Motilal Oswal Multicap Fund – Outperformed the benchmark index

The chart below shows the growth of Motilal Oswal Multicap Fund versus its benchmark index since inception of the fund. You can see that the fund has outperformed its benchmark index.

Source: Advisorkhoj Research, as on 13^th June 2025.

Outperformed peers (category average) across market conditions – both up and down markets

Motilal Oswal Multicap Fund has outperformed the category average in 9 out of 11 months since the inception of the scheme. You can see that the fund outperformed the category average in both up and down markets.

Source: Advisorkhoj Research, as on 31^st May 2025.

Limited downside risks for investors

Source: Advisorkhoj Research, as on 31^st May 2025.

More balanced allocations compared to peers

Motilal Oswal Monthly Portfolio, Advisorkhoj Research, as on 31^st May 2025.

Investment Strategy

QLGP Framework

Motilal Oswal MF follows a disciplined investment approach based on Quality (Q), Growth (G), Longevity (L) and a Price (P) framework.

Current portfolio positioning

Source: Motilal Oswal Monthly Portfolio, Advisorkhoj Research, as on 31^st May 2025.

Why invest in Motilal Oswal Multicap Fund?

• Long and successful track record of Wealth Creation by investing in large, mid and small cap stocks


• The fund house has 20 years expertise in picking multi baggers. Select stocks picked by the AMC in the last 5 to 10 years have grown 6X to 24X (source: Motilal Oswal AMC)


• The fund will invest in House identified high growth themes which can evolve as leaders of current market cycle


• Uniquely positioned high conviction multi-cap fund – higher alpha creation potential based on track record of the fund managers and fund house


• Quality of business and management will be a key factor. Quality of business and management are important from the point of view of earnings growth sustainability and to ensure that the management takes care of the interests of minority shareholders.

Who should invest in Motilal Oswal Multicap Fund?

• Investors with investment horizon of 3-7 years for long term wealth creation


• Investors looking to capitalise on the potential of emerging businesses benefitting from India's economic growth


• Investors seeking to participate in high growth themes Leading the markets


• Investors looking to invest in a unique high conviction focused multi cap portfolios


• Investors seeking a fund with disciplined allocation to all market cap segments at all points of time


• Investors with very high risk appetites

Investors should consult their financial advisors or mutual fund distributors if Motilal Oswal Multicap Fund is suitable for their investment needs

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