{"id":1169,"date":"2019-10-03T09:31:20","date_gmt":"2019-10-03T09:31:20","guid":{"rendered":"http:\/\/blog.certifiedfinancialguardian.com\/?p=1169"},"modified":"2019-10-03T12:02:51","modified_gmt":"2019-10-03T12:02:51","slug":"is-motilal-oswal-large-midcap-fund-a-good-bet-for-long-term-gains","status":"publish","type":"post","link":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/10\/03\/is-motilal-oswal-large-midcap-fund-a-good-bet-for-long-term-gains\/","title":{"rendered":"Is Motilal Oswal Large & Midcap Fund A Good Bet For Long-Term Gains?"},"content":{"rendered":"\n

Equity markets have been volatile lately due to a host of domestic and international macro and microeconomic factors. If you notice the graph given below, Smallcap index has had a drastic fall but Largecap index and Midcap index have managed to sustain through the headwinds over a year.<\/p>\n\n\n\n

Graph: Movement\nof Indices<\/em><\/strong><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Data\nas on October 3, 2019
(Source: ACE, MF)<\/p>\n\n\n\n

Looking at the current market sentiment,\nseveral fund houses are of the view that when largecap space and midcap space are\ncombined, one gets an opportunity to invest in stability of largecaps and high\ngrowth potential of midcaps. Hence even Motilal Oswal Mutual Fund launched Motilal\nOswal Large and Midcap Fund (MOLMF). <\/p>\n\n\n\n

The fund house is of the view that Large caps consists of blue-chip companies, usually, market leaders that have established track record and they keep getting better and bigger with less volatility involved. Whereas midcap companies appreciate into large cap stocks over long term. Hence a large and midcap fund can provide better risk-adjusted returns. <\/p>\n\n\n\n

Image: Combination\nof stability and growth<\/em><\/strong><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

(Source: Motilal Oswal Large and Midcap Fund Presentation<\/a>)<\/p>\n\n\n\n

Being an equity scheme, Motilal Oswal Large and Midcap Fund has high risk. But it is placed below Mid, Small Cap<\/a> and Thematic funds on the risk-return spectrum. Hence, it is considered to be the safest among equity funds after the large-cap funds.<\/p>\n\n\n\n

[Read: <\/strong>Why Comparing Returns to Risk Is More Meaningful!<\/a>]<\/p>\n\n\n\n

So, MOLMF will follow the asset allocation\nlimits to allocate its assets between 35% to 65% investment in equity &\nequity related instruments of large-cap and mid-cap companies each. The fund\nmay also allocate utmost 30% of its assets to equities and equity-related\nsecurities of other than large cap and mid-cap companies with the remaining\nallocation to debt instruments and money market instruments<\/p>\n\n\n\n

Thus, when you plan for long-term goals, want the stability of large-caps along with the agility of mid-caps in the journey of wealth creation and accomplishing financial goals and if you have the stomach for moderately high risk, you may skew your equity portfolio to a Large & Mid-cap fund<\/a>.<\/p>\n\n\n\n

Table\n1:  Details of MOLMF<\/em><\/strong><\/p>\n\n\n\n\n \n \n \n \n \n \n \n
Type<\/strong><\/td>\n An open-ended equity scheme investing in both largecap and mid-cap stocks<\/td>\n Category<\/strong><\/td>\n Large and Midcap Fund<\/td>\n <\/tr>\n
Investment Objective<\/strong><\/td>\n To provide medium to long-term capital appreciation by investing primarily in Large and Midcap stocks.

\n However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved.<\/td>\n <\/tr>\n
Min. Investment<\/strong><\/td>\n Rs 500 and in multiples of Re 1 thereafter<\/td>\n Face Value<\/td>\n Rs 10 per unit<\/td>\n <\/tr>\n
Plans<\/strong><\/td>\n \u2022 Regular

\n \u2022 Direct<\/td>\n 		Options<\/strong><\/td>\n \u2022 Growth*

\n \u2022 Dividend (Pay-out and Reinvestment)
\n
\n *Default option<\/td>\n <\/tr>\n
Entry Load<\/strong><\/td>\n Nil<\/td>\n Exit Load<\/strong><\/td>\n 1% – If redeemed on or before 15 days from the date of allotment.

\n Nil – If redeemed after 15 days from the date of allotment.<\/td>\n <\/tr>\n
Fund Manager<\/strong><\/td>\n Mr Aditya Khemani (Equity) and Mr Abhiroop Mukherjee (Debt)<\/td>\n Benchmark Index<\/strong><\/td>\n BSE 200 TRI<\/td>\n <\/tr>\n
Issue Opens<\/strong><\/td>\n September 27, 2019<\/td>\n Issue Closes:<\/strong><\/td>\n October 11, 2019<\/td>\n <\/tr>\n<\/table>\n\n\n\n

(Source: Scheme\nInformation Document<\/a>)<\/p>\n\n\n\n

How will the scheme allocate its assets?<\/strong><\/p>\n\n\n\n

Under normal circumstances, it is\nanticipated that the asset allocation of MOLMF will be as follows:<\/p>\n\n\n\n

Table\n2: MOLMF ‘s Asset Allocation<\/em><\/strong><\/p>\n\n\n\n\n \n \n \n \n \n \n \n \n
Instruments<\/strong><\/td>\n Indicative Allocation
(% of Total Assets)<\/strong><\/td>\n 		Risk Profile<\/strong><\/td>\n <\/tr>\n
Minimum<\/strong><\/td>\n Maximum<\/strong><\/td>\n <\/tr>\n
Equity and Equity related instruments of Large-cap companies<\/td>\n 35<\/td>\n 65<\/td>\n Medium to High<\/td>\n <\/tr>\n
Equity and Equity related instruments of Mid-cap companies<\/td>\n 35<\/td>\n 65<\/td>\n Medium to High<\/td>\n <\/tr>\n
Equity and Equity related instruments of other than above<\/td>\n 0<\/td>\n 30<\/td>\n Medium to High<\/td>\n <\/tr>\n
Units of liquid\/ debt schemes, Debt, Money Market Instruments, G-Secs, Cash and Cash at call, etc.<\/td>\n 0<\/td>\n 30<\/td>\n Low to Medium<\/td>\n <\/tr>\n
Units issued by REITs and InvITs<\/td>\n 0<\/strong><\/td>\n 10<\/td>\n Medium to High<\/td>\n <\/tr>\n <\/tbody>\n<\/table>\n\n\n\n

(Source: Scheme Information Document<\/a>)<\/p>\n\n\n\n

What will be the Investment Strategy?<\/strong><\/p>\n\n\n\n

The investment objective of Motilal Oswal\nLarge and Midcap Fund is to generate returns by investing in a combined\nportfolio of equity and equity-related instruments including derivatives, debt\ninstruments, money market instruments, REITs and InvITs.<\/p>\n\n\n\n

Equity\nInvestment<\/strong>: The MOLMF will follow an active\ninvestment style using bottom-up stock picking. The fund managers shall\nidentify and invest in shares of businesses run by high-quality management\n& having sustainable and scalable business models. They shall invest in\nshares of high-quality businesses having sustainable and scalable business\nmodels thus using QGLP (Quality, Growth, Longevity & Price) as the key\nevaluation parameters.<\/p>\n\n\n\n

The businesses should have strong earnings\ngrowth prospects and be available at reasonable valuations. The scheme\u2019s portfolio\nshall comprise of high conviction stock ideas from across market-capitalization\nlevels\/sectors. The portfolio stocks may be potentially concentrated in a few\nmarket capitalization levels\/sectors which are expected to do well and have\nlower downside risk.<\/p>\n\n\n\n

Debt\nand Money Market<\/strong>: The MOLMF will invest in debt instruments\nincluding Government Securities, Corporate Debt, Other debt instruments and\nMoney Market Instruments with average maturity less than equal to 12 months to\nprotect the portfolio downside during a market downturn.<\/p>\n\n\n\n

Who will manage\nMOLMF?<\/strong><\/p>\n\n\n\n

The equity portion of Motilal Oswal Large\nand Mid-cap Fund will be managed Mr Aditya Khemani and Mr Abhiroop Mukherjee will manage the debt portion.<\/p>\n\n\n\n

Mr Aditya Khemani has overall 14 years of\nexperience in the Indian equity markets as an investment professional, out of\nwhich the last 10 has been in the role of a portfolio manager. Prior to joining\nMotilal Oswal Asset Management Company Ltd in September 2019, he was associated\nwith HSBC AMC for nearly 12 years. Further, he has worked in esteemed\norganizations like SBI Mutual Fund, ICICI Prudential AMC and Morgan Stanley\nAdvantage Services.<\/p>\n\n\n\n

Currently, Mr Khemani manages Motilal Oswal Long Term Equity Fund<\/a>.<\/p>\n\n\n\n

Mr Abhiroop Mukherjee is the Associate Vice President – Fixed Income\nat Motilal Oswal Asset Management Company\nLtd. He has a BCom(Honours) and PGDM  in Finance to his credit. He has over\n10 years of experience in the Fixed Income Securities trading and fund\nmanagement. Prior to joining the fund house, he\nworked as an Assistant Vice President of Fixed Income at PNB Gilts Ltd for 5\nyears<\/p>\n\n\n\n

Currently, Mr Mukherjee manages the debt component at the fund house that includes: Motilal Oswal Ultra Short -Term Fund<\/a>, Motilal Oswal Midcap 30 Fund<\/a>, Motilal Oswal Multicap 35 Fund<\/a> Motilal Oswal Long-Term Equity Fund<\/a> and Motilal Oswal Dynamic Fund<\/a><\/p>\n\n\n\n

The outlook for Motilal Oswal Large and\nMidcap Fund:<\/strong><\/p>\n\n\n\n

Motilal Oswal Large and Midcap Fund will be\nactively managed by the fund managers to achieve the stated investment\nobjective of the scheme of capital appreciation over medium to long term\ninvestment horizon by investing primarily in Large and Midcap stocks. <\/p>\n\n\n\n

As per the presentation<\/a>, the investment philosophy is centred on, ‘Buy Right: Sit Tight\u2019 principle. <\/p>\n\n\n\n