At first glance, the recent performance of Motilal Oswal Midcap Fund – Direct Plan – Growth Oswal Midcap Fund – Direct Plan – Growth looks disappointing. In fact, it has turned out to be the worst performer in the midcap fund category over the last one year. With a (–)11.82% return in one year, the fund not only lagged its peers but also emerged as the biggest loser across all funds managed by Motilal Oswal Mutual Fund during this period.
But stopping at the 1-year number would give only half the picture.
Short-term pain hides a strong medium-term story
While the fund struggled in the last one year—largely due to a sharp midcap correction and stock-specific issues—the longer time frames tell a very different story.
According to the Financial Express Mutual Funds Screener, this very fund is the top performer in the midcap category when returns are measured over 3 years and 5 years.
3-year return: 28.9% CAGR
5-year return: 23.8% CAGR
These numbers place the fund ahead of all other midcap funds over these periods. Interestingly, on both these time frames, it is also the best-performing fund within the Motilal Oswal stable.
How it compares with the benchmark
A look at benchmark comparison helps put things in perspective.
1 year:
Fund: (–)11.82%
Benchmark (NIFTY Midcap 150 TRI): (+)3.54%
-Clear underperformance in the short term
3 years (CAGR):
Fund: 28.89%
Benchmark: 23.60%
-Strong outperformance
5 years (CAGR):
Fund: 23.75%
Benchmark: 20.82%
-Fund beats the index comfortably
10 years (CAGR):
Fund: 18.49%
Benchmark: 17.99%
-Marginal but consistent edge over a full market cycle
In simple terms, the fund has failed badly in the short run, but has rewarded patient investors handsomely over longer periods.
Key details investors should know
Launch date: February 24, 2014
Fund type: Open-ended midcap equity fund
Benchmark: NIFTY Midcap 150 TRI
Returns since launch: 22.83% CAGR
Assets under management: Rs 38,003 crore (as of November 30, 2025)
Expense ratio (Direct plan): 0.74%
Risk level: Very High
This is clearly not a low-risk or conservative fund. It is designed for investors who can tolerate volatility and stay invested for the long term.
Risk profile at a glance
The fund falls in the Very High Risk category, which is typical for midcap-focused strategies.
Standard deviation: 17.89% (indicates higher volatility)
Sharpe ratio: 1.06 (reasonable risk-adjusted returns)
Sortino ratio: 1.33 (better downside risk handling)
Beta: 0.93 (slightly less volatile than the benchmark)
This means the fund can fall sharply in weak markets, but has historically compensated investors over time.
What does the portfolio look like?
The fund runs a concentrated portfolio, with meaningful exposure to a few high-conviction stocks.
Top 10 holdings (% allocation):
Persistent Systems – 10.03%
Coforge – 9.92%
Eternal – 8.69%
Dixon Technologies – 8.07%
Kalyan Jewellers – 7.98%
One97 Communications – 7.81%
Bharti Airtel – 5.25%
Polycab India – 4.97%
Aditya Birla Capital – 4.48%
KEI Industries – 4.36%
Such concentration can boost returns when calls go right—but can also hurt performance sharply during corrections.
Simple takeaway for investors
Short term: The fund has struggled badly and disappointed investors
Medium to long term: It has been among the best wealth creators in the midcap space
Who it suits: Investors with a long-term horizon (5+ years) and high risk tolerance
Who should avoid: Those looking for stability or quick gains
A word of caution on past returns
Past returns—even strong ones over 3 or 5 years—do not guarantee future performance. Midcap funds are especially sensitive to market cycles, valuation changes, and stock-specific risks. A fund that tops charts in one phase can easily turn into a laggard in another. Investors should avoid chasing recent rankings and instead focus on time horizon, risk capacity, and portfolio balance before investing.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.