The reason for Motilal Oswal setting its slogan as ‘Buy right, sit right’ can be seen in its investing style in portfolios like Motlilal Oswal MOSt focused Multi cap 35 Fund.
Multi cap funds are diversified equity mutual funds which invest in stocks of companies with different market capitalization. These are also spread across different sectors within each market cap in varying proportions to meet their investment objective.
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Multi cap funds basically comprise of a mix of large cap, mid cap and small cap stocks. Hence, these funds are comparatively less risky than pure mid cap or small cap funds.
Multi cap funds usually invest around 60-80% of their corpus in large cap funds, while the rest is distributed between mid cap and small cap funds.
Multi cap funds are suitable for an investment duration of 5-10 years.
Motilal Oswal MOSt Focused Multicap 35 Fund focuses on growth stocks and uses a bottom-up stock picking approach. It has returned an excess of 31+% returns in the last 4 years.
In fact, it has returned approximately 40% in last one year.
|Fund Category||Equity: multi cap|
|Risk Level||Below Average|
The investment objective of this scheme is to achieve long term capital appreciation by primarily investing in a maximum of 35 equity and equity related instruments across sectors and market capitalization levels.
The fund size in crores is Rs.8240.44
Stock allocations of Motilal Oswal MOSt Focused Multicap 35 Fund are:
- Minimum 65%: Equity and equity related instruments
- Maximum 35%: Debt/money market instruments
- The fund may invest in foreign securities upto 10% of total net assets
The portfolio invests in the following sectors- Finance, banking, auto, petroleum, consumer non-durables, pharmaceuticals, transportation, gas, retailing, cash and equivalents.
The top 10 holdings of this fund are:
|Housing Development Finance Corporation limited||8.63|
|Maruti Suzuki India Limited||8.38|
|HDFC Bank Limited||8.33|
|Hindustan Petroleum Corporation Limited||6.88|
|Bharat Petroleum Corporation Limited||6.35|
|Induslnd Bank Limited||5.64|
|Eicher Motors Limited||5.22|
|Bajaj Finance Limited||4.90|
|PNB Housing Finance Limited||4.77|
|Britannia Industries Limited||4.37|
The fund, launched in April 2014, heavily leans towards the banking and financial sectors.
The top ten holdings account for 65% of the portfolio. The fund has minimal exposure to the smaller market cap segment. Therefore, the risk of volatility is low. The risk of concentration is also reduced by choosing high quality stocks.
The fund manager runs a concentrated portfolio with 18-22 stocks, though there is the flexibility to go up to 35 stocks. This is done to ensure that over diversification does not lead to dilution of returns.
Should you invest in Motilal Oswal MOSt Focused Multicap 35 Fund?
This fund is suitable for investors who are seeking:
- Long term capital growth
- Investment in a maximum of 35 equity and equity related instruments across sectors and market capitalization levels
Even though this fund has low risk involved, one should carefully invest in it. The fund has an exit load of 1% if redeemed on or before 1 year from the date of allotment.
Motilal Oswal MOSt Focused Multicap 35 Fund has been performing astonishingly well. It has consistently outperformed its benchmark, Nifty 500.
The fund is amongst the top quartile in the multi cap category. It also has good fund size and good fund managers, Mr. Gautam Sinha Roy, Mr. Siddharth Bothra.
The only drawback of the fund is that it has a high expense ratio. Therefore, it should be taken into consideration before investing.
Investors who like to invest with a long term wealth creation view must have a look at this fund.
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Disclaimer: the views expressed here are those of the author. Mutual funds are subject to market risks. Please read the offer document before investing.