Motilal Oswal Small Cap Fund: Outperforming benchmark and peers

Equity market has been volatile this year due to the ongoing geo-political conflict which has disrupted energy supplies and caused surge in crude oil prices. FPIs have been net sellers of equity on a year-to-date basis (see the chart below). FPI outflows tend to impact large cap stocks more than mid and small cap stocks.

Source: NSDL, as on 15^th September 2026

Domestic flows through mutual funds have remained. Barring one or two months, monthly SIP flows have been steadily increasing (see the chart below).

Source: AMFI, as on 31^st August 2026

Small cap stocks have outperformed large cap stocks on a year-to-date basis (see the chart below). Large cap stocks are more impacted by global factors like interest rates / bond yields, global commodity prices, currency movements and FII flows. In the current environment, small cap funds can provide attractive long term investment opportunities for investors. In this article, we will review Motilal Oswal Small Cap Fund, one of the best performing funds in the small cap category.

Source: NSE, Advisorkhoj Research as on 15^th September 2026

Motilal Oswal Small Cap Fund – Outperformed benchmark index

The chart below shows the growth of Rs 10,000 investment in Motilal Oswal Small Cap Fund versus the benchmark index since the inception of the scheme. You can see that the scheme outperformed the benchmark index.

Source: Advisorkhoj Research as on 15^th September 2026

Smaller drawdowns compared to the benchmark

The chart below shows drawdown of Motilal Oswal Small Cap Fund versus the benchmark index since the inception of the scheme. You can see that the scheme experienced smaller drawdowns compared to the benchmark index.

Source: Advisorkhoj Research as on 15^th September 2026

Outperformed the benchmark index across rolling 1-year tenures

The chart below shows the 1-year rolling returns of Motilal Oswal Small Cap Fund versus its benchmark index since the inception of the scheme. You can see that the scheme consistently outperformed the benchmark.

Source: Advisorkhoj Research as on 15^th September 2026

The chart below shows the distribution of 1-year rolling returns of Motilal Oswal Small Cap Fund versus its benchmark index since the inception of the scheme. You can see that the scheme had lesser instances of negative returns than the benchmark index. At the same time, the instances of 12%+ CAGR returns were significantly higher for the scheme compared to the benchmark.

Source: Advisorkhoj Research as on 15^th September 2026

Outperformed the benchmark index across rolling 1-year tenures

The chart below shows the 1-year rolling returns of Motilal Oswal Small Cap Fund versus the small cap category average since the inception of the scheme. You can see that the scheme consistently outperformed the category average.

Source: Advisorkhoj Research as on 15^th September 2026

The chart below shows the distribution of 1-year rolling returns of Motilal Oswal Small Cap Fund versus the category average since the inception of the scheme. You can see that the scheme had lesser instances of negative returns than the category average. At the same time, the instances of 12%+ CAGR returns were significantly higher for the scheme compared to the category average.

Source: Advisorkhoj Research as on 15^th September 2026

Investment strategy

Current portfolio positioning

Source: Motilal Oswal MF, as on 31^st August 2026. Industry classification as per AMFI

Why invest in Motilal Oswal Small Cap Fund?

• Long & Successful Track Record of Wealth Creation by early identifying & Investing in Small Caps


• House identified high growth themes which we believe are evolving as leaders of current market cycle


• Portfolio curated to capture potential opportunities.


• Quality of Business and Management- key factor for small cap investing QGLP Investment Philosophy


• Selectively Positioned High Conviction Small Cap Fund


• Skin in the game, participation by promoters

Who can find Motilal Oswal Small Cap Fund suitable?

• Investors looking to increase allocation to small cap through dedicated funds


• Investors looking to invest in high growth portfolios for long term wealth creation


• Investors seeking to capitalize on the potential of emerging businesses not otherwise represented in Large Cap space


• Investors seeking to invest in a high conviction focused small cap portfolio


• Investors with minimum 5 year investment horizon


• Investors looking to invest in small cap through SIP


• Investors with very high risk appetite

Investors should consult with their financial advisors or mutual fund distributors if Motilal Oswal Small Cap Fund is suitable for their investment needs.