When it comes to mutual fund research in India, one name that keeps cropping up is Motilal Oswal. They have earned their reputation by obtaining results through the application of their research-driven approach with its “Buy Right, Sit Tight” mantra over the course of their existence. Instead of the ubiquitous diversified approach adopted by most of the fund management companies, this group has developed focused and high-conviction portfolios.
However, talking about which funds are the best is a highly subjective matter. It really depends on the needs of an individual investor, who may well be in different parts of the life cycle when it comes to investing. In this article, you will learn about the different funds in Motilal Oswal’s repertoire and their uniqueness. It will also explain how to make the choice of the right fund.
Who Is Motilal Oswal Asset Management Company?
Motilal Oswal Mutual Fund started in December 2009 and is now managing assets worth over ₹1.5 lakh crore in equity, debt and hybrid categories, with a variety of schemes, including large-cap funds, mid-cap funds, small-cap funds and thematic funds. The fund manager is a subsidiary of Motilal Oswal Financial Services Ltd, which started as a sub-broking unit and has turned into one of the prominent financial services groups in the country.
What makes Motilal Oswal special is not the AUM size, which is far less than many fund houses, but the investment philosophy of the company. This company has a concentrated investment philosophy, focusing on quality. Unlike most of the diversified funds that have 60-80 stocks, the Motilal Oswal schemes invest in a tight collection of stocks.
Top Motilal Oswal Mutual Funds to Know About
Here’s a look at some of the fund house’s most talked-about schemes across categories. Remember, “top” here refers to popularity and historical track record — not a guarantee of future performance.
Motilal Oswal Midcap Fund
This scheme can be called the flagship one in the fund house. In fact, it is among the most popular mid-cap schemes in the industry. Since inception, the average annualized return of the scheme has been more than 22%. Moreover, this fund has emerged as a leader in the mid-cap category in 2024, with returns exceeding the category average. The manager of this fund invests in firms that are middle-sized with huge growth potential, hold a leadership position in their marketplaces, and have scalable business ventures.
Mid-cap funds are more suitable for long-term investors, typically for 7 years and more, as investment in mid-caps involves higher risks than investment in large-cap stocks.
Motilal Oswal Flexi Cap Fund
Flexi cap funds have the advantage of investing in large, mid and small caps depending on the opportunities sought by the fund managers. In 2024, one of the Flexi cap funds by Motilal Oswal stood out from its contemporaries by performing a good deal better than both its rivals and the benchmark index. This advantage in investing in different market-cap segments makes Flexi-cap funds highly effective in fluctuating and changing times.
Motilal Oswal ELSS Tax Saver Fund
Motilal Oswal’s equity-linked savings scheme fund can be a good option for investors who wish to get tax advantages under section 80C along with exposure to the equity market. Being an ELSS fund, it has a lock-in period of 3 years, which can work to the benefit of the investors by enforcing a disciplined approach towards long-term investment.
Motilal Oswal Focused Fund
In accordance with AMC’s principles, this strategy has a concentrated portfolio with high-conviction stocks — usually much fewer investments compared to a regular diversified equity fund. The strategy is targeted at investors who believe in “less is more” and are fine with the increased volatility of concentration.
Debt and Hybrid Options
In addition to equity options, Motilal Oswal provides debt instruments and hybrid offerings for clients who want more assurance or a mixed methodology. These options are often more ideal for cautious clients and people who want to moderate equity-dominant portfolios.
What Makes Motilal Oswal’s Approach Different?
The majority of the funds in India adopt the diversification-first strategy by investing in several companies to minimize risks, whereas Motilal Oswal adopts a completely different strategy where it invests a lot of money in a few companies that it is confident about.
The entire strategy can be summarized as “Buy Right, Sit Tight”. This strategy comprises of two assumptions:
- Buy Right: Buy the companies that are of the highest quality with growth visibility, good management and sustainable competitive advantage.
- Sit tight: Sit tight after the purchase; don’t churn the portfolio based on the market.
This kind of strategy gives excellent performance during favorable market cycles, although it underperforms diversified funds during those cycles when their strategies become unfavourable.
How to Evaluate Which Motilal Oswal Fund Fits You
Instead of pursuing whichever fund outperformed last year’s investment returns, here is a more practical way to analyze any Motilal Oswal funds (or any mutual fund).
Know the Type of Fund. Mid-cap and small-cap investments require more time (7+ years) to level out their volatility levels than large caps or flexi-cap options. Although large-cap or flexi-cap options can be utilized in somewhat shorter-term commitments, a minimum of five years is still needed in each instance when investing in equity.
Analyze the Portfolio: Since Motilal Oswal funds uses highly consolidated portfolios, check the overall number of their investments and the percentage of the top stocks in the total portfolio.
Measure Against Benchmark and Not Just That of Peers. The absolute return earned by funds doesn’t mean anything by itself. Always check it against the benchmark index and category median over various periods of time including one year, three years, and five years, not just a single year.
Examine the Expense Ratio and Exit Load. Lower expense ratios (especially in direct plans) can add up to significant amounts in the long term. Do check at exit load in case you need liquidity earlier than the prescribed holding period.
Check the Consistency of the Fund Manager: The history of the fund is considered reliable only as long as its management team is stable. Frequent changes among fund managers quite often indicate changes in strategy that may affect future performance.
Should You Invest via SIP or Lump Sum?
Most investors will likely find that a Systematic Investment Plan (SIP) is the better option into Motilal Oswal’s equity offerings, particularly in view of the concentrated nature of the funds. SIPs enable one to average the cost of investment through the ups and downs of the market, which means the effects of short-term market volatility will be less pronounced for a concentrated portfolio.
Investing through a lump sum can be ideal for someone sitting on a large amount of money, and when valuations in the market are reasonable, but this comes with the danger of getting exposed to the risk associated with timing the entry point — which is a risk that concentrated funds are much more prone to than diversified ones.
A Word of Caution
It’s always important to remember that a fund’s past success does not guarantee success in the future. A fund that was successful in one year — as certain Motilal Oswal funds have been — may not continue to be successful indefinitely after that one year. Concentrated portfolios carry more idiosyncratic risk than more diversified funds, but that does not mean that investors need to shy away from investing in concentrated portfolios; rather, it means that investors need to carefully consider how to allocate their investments across the various funds they want to invest in.
It is also important to make sure to check the latest NAV, returns, expenses, and portfolio before investing in the fund.
Conclusion
Through its concentration and research-based investment strategy, Motilal Oswal has managed to establish itself as a unique player in the competitive Indian mutual fund market. Mutual funds such as the Midcap Fund and the Flexi Cap Fund have posted high returns and have been at the top of their categories for several years in a row, thus becoming preferred mutual funds of people preferring a high-conviction approach.
However, it is difficult to say what would be the best Motilal Oswal mutual fund for each individual investor since it would depend on your risk profile, investment horizons, and tolerance of concentration in your portfolio compared to conventional diversified investments. When selecting mutual funds, it makes sense to take a look at the composition of the mutual fund, see how the returns compare to the benchmark index, and seek advice from a SEBI-registered financial adviser.
Frequently Asked Questions (FAQs)
Which mutual fund will perform best in 2026?
Since previous performance is not repeatable and future market returns are uncertain, it is impossible to predict which mutual fund will do the best in 2026.
Which is the best performing Motilal Oswal mutual fund?
Motilal Oswal Midcap Fund is one of the most successful and large-scale funds offered by Motilal Oswal Mutual Fund, giving high annualized returns of about 22% for the last five years and even more impressive 10-year returns.
What are Motilal Oswal’s buy recommendations for 2026?
Motilal Oswal’s institutional and learning center research reveals important structural themes and the best large-cap/mid-cap stock selections for 2026.
What are the best investment funds for 2026?
Major financial professionals propose conservative fixed-income alternatives, large-cap growth options, and inexpensive broad-market index funds as the best investment funds for 2026.
Which MF is best to invest in now?
Your financial objectives, investment horizon, and risk tolerance will all determine which mutual fund (MF) is “best” for you.