This Midcap Mutual Fund generated 28% in 1 year Vs benchmark return of 6%

This Midcap Mutual Fund generated 28% in 1 year against a benchmark return of 6%Midcap mutual funds invest in mid cap companies in India. These can provide high returns, however high, risk too. There is one unique Midcap fund scheme that generated 28% returns in the last 1 year and beaten the benchmark return of 6%. When the entire Midcap funds list has generated low returns in last 1 year due to market correction, how is it possible for this fund to generate such abnormal returns?  In this article we would talk about Motilal Oswal Midcap 30 Fund that generated superior returns in last 1 year and beaten the benchmark over 3.5 times.

Also Read: Best Largecap Mutual Funds to invest in 2022

Investment objective of Motilal Oswal Midcap 30 Fund

This mutual fund scheme aims to achieve long term capital appreciation by investing in a maximum of 30 quality mid cap companies having long-term competitive advantages and potential for growth.

Basic Details of Motilal Oswal Midcap 30 Fund

This Midcap fund was launched in Feb-2014.

Benchmark of this fund is Nifty Midcap 150 Total Return Index (TRI).

The current expense ratio is 0.96%

Assets under management (AUM) – Rs 2,575 Crores

Where does Motilal Oswal Midcap 30 Fund invest?

Currently it invests 96% in equity, 3% in debt and holds 1% in cash.

It invests majorly in mid cap companies, however, it would also invest a small portion in large cap as well as in Small cap companies.

Its top 10 holdings are Tube investments, Phoenix Mills, Gujarat Gas, CG Power, Campus Activewear, AU Small Finance Bank, Voltas, VIP industries, Max Financial Services and Barbeque Nation Hospitality.

How did this mid cap mutual fund performed in the past?

Here is the fund performance – annualized returns, SIP returns and rolling returns

A) Fund Performance – Annualised returns

  • Last 7 years – 14% (1 lac has turned 2.4 Lacs)
  • Last 5 years – 14% (1 lac has turned 1.9 Lacs)
  • Last 3 years – 28% (1 lac has turned 2.1 Lacs)
  • Last 1 year – 28% (1 lac has turned 1.3 Lacs)

B) Fund Performance – SIP Returns

  • Last 5 years – 22% (10K SIP per month has turned 10.7 Lacs)
  • Last 3 years – 33% (10K SIP per month has turned 5.7 Lacs)

C) Fund Performance – Rolling Returns

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 41% of the times
  • 8% to 12% returns – 19% of the times
  • < 8% returns – 24% of the times
  • Negative returns – 16% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 51% of the times
  • 8% to 12% returns – 24% of the times
  • < 8% returns – 24.5% of the times
  • Negative returns – 0.5% of the times

This fund generated 21.5% annualized return since inception in 2014.

You may like: Best Largecap and Midcap Mutual Funds for 2022

How is the fund performance in comparison with peers?

Let us see how is the performance of this fund compared to its peers in the Midcap funds segment.

1) The annualized returns of all mid cap mutual funds in the last 5 years are ranging between 8.7% to 20.5%. Motilal Oswal Midcap 30 Fund ranks at 8th position.

2) The annualized returns of all Midcap funds in the last 3 years are ranging between 17% to 39%. Motilal Oswal Midcap 30 Fund ranks at 5th position.

3) In the last 1 year, Midcap funds have generated returns between minus 2.4% to 27.8%. Motilal Oswal Midcap 30 Fund ranks 1st position.

Scheme Name  1 Yr 3 Yrs 5 Yrs
Quant Mid Cap Fund 14.2% 35.8% 20.5%
PGIM India Midcap Opps Fund 12.2% 39.3% 19.4%
Axis Midcap Fund 5.7% 25.0% 18.1%
Edelweiss Mid Cap Fund 7.5% 28.2% 15.9%
Kotak Emerging Equity Fund 9.5% 26.8% 15.6%
Invesco India Mid Cap Fund 4.1% 24.6% 15.3%
Nippon India Growth Fund 8.4% 24.4% 14.2%
Motilal Oswal Midcap 30 Fund 27.8% 27.9% 14.2%
Tata Midcap Growth Fund 6.7% 23.5% 13.5%
SBI Magnum Midcap Fund 14.7% 28.8% 13.5%
UTI Mid Cap Fund 6.3% 26.4% 13.3%
Baroda BNP Paribas Midcap Fund 3.0% 24.7% 12.9%
ICICI Prudential Midcap Fund 6.5% 21.8% 12.6%
HDFC Mid-Cap Opportunities Fund 9.6% 23.0% 12.2%
Taurus Discovery (Midcap) Fund 1.5% 22.1% 11.9%
DSP Midcap Fund -2.4% 18.7% 10.9%
Franklin India Prima Fund 1.3% 17.2% 10.3%
Motilal Oswal Nifty Midcap 100 ETF 8.3% 22.6% 10.1%
L&T Midcap Fund 1.9% 18.7% 9.5%
Aditya Birla Sun Life Mid Cap Fund 7.8% 20.1% 9.2%
IDBI Midcap Fund -0.1% 19.5% 8.9%
Sundaram Mid Cap Fund 8.1% 18.9% 8.7%

Conclusion: This mutual fund scheme invests only in 30 Midcap stocks. It generated superior returns in both annualized returns as well as in SIP / rolling returns perspective. While this fund generated 27% returns in last 1 year compared to benchmark returns of 6%, one should not carry away with such high returns. If you observe, in medium to long term, even this fund is able to generate 14% returns which are in line with other mid cap funds. The only difference is that it generated abnormal returns in last 1 year. If you have not invested in any other mid cap fund, you can make this fund as part of your portfolio. You can also check our Top Midcap Mutual Fund recommendations post earlier too.

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Suresh KP

8 comments

  • Savaee

    Hi Suresh Sir, thanks for another informative article.
    Please suggest whether combination of one active and one passive fund for large, mid, flexi and small cap fund is ideal combination for aggressive investor for medium to long term investment horizon or should we have all active funds.

    • Savee, Investing in index funds in N50 always rewards investors. However, if you consider other index categories like midcap or smallcap, there are many active funds that are outperforming such indexes. I am personally investing in index + active in largecap, global index funds and then only in active funds in midcap/smallcap segment. In flexicap anyways we don’t have choice.

      • Savaee

        Thanks Sir,
        Please guide with good index and active fund for large cap and active funds to invest from other categories. If SIP amount is 25000 per month, what should be the allocation?

        • I am personally investing in below funds and would not advice differently to you. Global funds I invested before restrictions, you can do it once the restrictions are lifted.
          Largecap/Largecap-Midcap – UTI Nifty50 Index Fund and Canara Robecco emerging blue-chip fund
          Flexicap – Parag Parikh Flexicap fund
          Midcap – Quant Midcap fund
          Smallcap – Quant Smallcap Fund
          Global index fund – Motilal Oswal NASDAQ 100 Index Fund and Motilal Oswal S&P 500 Index Fund

          Between flexicap fund and other funds, there could be overlap, but i felt that’s okay.

  • Shesh Narayan Buxy

    Excellent analysis. Return shown may ne based on entry at most appropriate NAV day. Practically return defers

  • Kamal Garg

    One year return is definitely stupendous but 3 and 5 year returns are comparable with other AMC/Schemes and nothing great about it. But, nevertheless, good returns.

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