Motilal Oswal MOst Focused Multicap 35 Fund – Rating & Review - Invest • RoboAdviso | Best Blog for Mutual Fund and Investment in India

Motilal Oswal MOst Focused Multicap 35 Fund – Rating & Review – Invest

Roboadviso     Mutual Funds Rating     Posted On, Wed 7th June, 2017     No comments
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Motilal Oswal Most focused multicap 35 fund

Motilal Oswal MOst Focused Multicap 35 Fund is a fund which aims for capital growth in the long term via significant investments in not more than 35 equity and equity linked securities across different levels of market capitalization and across different sectors.

Presented below is a detailed review of this fund which will provide you with all the necessary information that you require so as to make an informed choice about whether to sell, buy, or hold this fund.

Basic costs and other information

Motilal Most Focused Multicap 35 Fund was launched on April 28, 2014. Despite it being a fairly new fund, it has done very well and has become very popular with investors. As of 30th April 2017, the assets of this equity and equity linked fund totals to INR 6,543 crores. The minimum required investment through the systematic investment planning (SIP) method is INR 1000, while it is INR 5000 if the lump sum route is chosen.  The expense ratio as of 30th April 2017 is 2.33 percent. Currently the exit load of this fund is nil or 0%.

Gautam Sinha Roy has been the fund manager since May 2014. Some of the other funds that he has successfully managed, or is currently managing, include Motilal Oswal MOSt Focused Long Term Fund – Regular Plan and Motilal Oswal MOSt Focused Dynamic Equity Fund – Regular Plan. The fund’s co-manager is Taher Badshah who joined in May 2015.

Allocation of the fund

As of 28 April 2017, the fund’s allocation stands as 99.75 percent in equities and 0.24% in Cash/Call. The portfolio is focused on investments in large-cap stocks; it has 70 percent asset investment in large-caps and 26 percent in mid-caps.

As of 28 April 2017, the top 6 sectors that the fund’s portfolio focuses on include Banking/Finance (39.73%), Pharmaceuticals (16.18%), Automotive (14.12%), Oil & Gas (12.50%), Food & Beverage (7.88%), and Manufacturing (5.26%)

As of 28 April 2017, the top 6 stocks that make up the fund portfolio include HDFC Bank (9.30%), Maruti Suzuki India (7.93%), Indusind Bank (7.42%), RBL Bank (6.36%), Eicher Motors (6.19%), and BPCL (6.18%).

Performance

As of June 02, 2017, Motilal Oswal MOst Focused Multicap 35 Fund has produced a 30.27 percent return per annum on investment in the last 3-year period. It indicates that the fund beat its ‘Nifty 500’ benchmark of 12.44 percent per annum for this period by a huge margin. The fund also outpaced the category average of 16.33 percent for the past three year period. From the time of launch the fund has delivered 32.87 percent per annum returns.

In the past 1-month, 3-months, and 1 year, the fund has shown 1.59, 12.62, and 34.89 percent returns. Thus the 1-year returns of the fund are over 9% points as compared to category returns and more than 12% points over the benchmark returns. For the past 3-month period, the outperformance margins of the fund vis-à-vis category and benchmark are 3 and 3.5 percent respectively.

Analysis

If the topmost holdings are taken into consideration, then it can be said that the Motilal Oswal Most Focused Multicap 35 Fund heavily leans towards the banking and finance sectors. As per data of the past 3 years, the fund’s standard deviation, i.e., the volatility of the returns of the fund vis-à-vis its average, is 15.46% as of 31st May 2017. This is slightly higher than the category average which is 14.37% for the same period.

When the returns of Motilal Most Focused Multicap 35 Fund are compared against its peers during the past 3 year period, then at 30.27 percent returns per annum, it significantly outperforms similar funds like Franklin India High Growth Companies Fund (22.26%), ICICI Prudential Indo Asia Equity Fund (16.69%), ICICI Prudential Nifty Next 50 Index Fund (18.86%), and Kotak Select Focus Fund Regular Plan (21.21%). When looking at the fund’s returns from a 1-year perspective, the other funds in the category have slightly lower returns as compared to the Motilal Most Focused Multicap 35 Fund returns of 34.89%.

The Motilal Oswal Most Focused Multicap 35 Fund began 3 years ago and has posted solid performance since then. Experts believe that there may be some correction, but instead of slowing down the market is currently achieving new peaks. In such uncertain times, it is best to bet on a multi-cap fund with increased flexibility to swing between risky mid-cap stocks and comparatively safer large-caps. For this category, Motilal Most Focused Multicap 35 Fund is a great choice. It has consistently outperformed and done better than its benchmark in both market upsides and downsides.

The approach followed by the fund is bottom up selection of stocks, investments in growth oriented funds, and increased focus on a few choice quality stocks which can be grabbed at reasonable valuations. The fund also does not rule out paying high prices for stocks that have potential for significant future growth. 

The fund manager has stated that the compactness of the portfolio is what gives it the freedom to optimize the diversification of risk. A smaller portfolio may increase the concentration of risk, but that gets alleviated due to selection of high quality securities. Churn is kept in check via the buy and hold strategy. The reasonably big size of the corpus has also ensured that the expense ratio of the fund remains less than the category average. Investors should invest due to the inherent growth potential of the fund and its positive outlook.

Should I sell, buy, or hold?

The solid and consistent outperformance of Motilal Oswal MOst Focused Multicap 35 Fund over the past 3 years since launch means that the fund gains our approval. Our suggestion to all investors is – “Buy.”

Pros

Excellent Performance
Excellent Consistency
Good Fund Managers
Good Fund Size

Cons

High Expense Ratio
Above Average Fund House

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