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Summary: We’ll start by breaking down the stocks Motilal Oswal Mid Cap Fund bought and sold in August, giving you a clear view of its latest high-conviction moves. Then, we’ll reveal the two sectors where the fund has placed nearly two-thirds of investors’ money, something that could define its future performance.
Motilal Oswal Mid Cap Fund continues to dominate the mid-cap mutual fund space, and for good reason. This five-star rated fund by Value Research has delivered eye-popping returns over the last few years – 28.5 per cent CAGR in the past three years and 34.6 per cent in the last five – making it the second-best and best performer in those time frames, respectively, across all mutual funds.
This stellar performance has drawn investors in droves. Its assets under management (AUM) have ballooned in just five years, from around Rs 1,800 crore in 2020 to Rs 34,780 crore today, making it one of the largest mid-cap funds in India. With so much investor capital at work, it’s worth taking a close look at what this fund has been buying and selling in the market lately.
Fresh buy
The big headline from August is that Motilal Oswal Mid Cap Fund made a fresh entry into Eternal (Zomato), picking up a 1.04 per cent stake in the company. This is a significant move because it immediately makes Eternal the fourth-largest holding in the fund’s portfolio, with a hefty 9.03 per cent weight. The fund is clearly taking a high-conviction bet on the food delivery and quick commerce ecosystem, signalling confidence in the company’s ability to sustain its profitability turnaround.
The fund upped its exposure in 12 other companies
- One97 Communications (Paytm): Stake jumped from 2.18 per cent to 3.92 per cent, the largest incremental buy last month.
- Kalyan Jewellers: Increased from 4.85 per cent to 5.81 per cent. This has pushed the stock into the top five holdings of the fund.
- Tube Investments of India: Stake rose by 0.72 per cent, indicating continued confidence in this conglomerate.
- Coforge: Already the second largest holding in the fund’s portfolio, this IT services play now has a nearly 10 per cent weighting in the fund’s portfolio.
- Other additions included Prestige Estates, Supreme Industries, Kei Industries, Aditya Birla Capital, Kaynes Technology, Trent, Polycab India and Persistent Systems.
Overall, these buys show the fund’s preference for scalable consumer businesses (Kalyan, Trent), technology service providers (Coforge, Persistent) and niche leaders in manufacturing and infrastructure (Tube Investments, Supreme and Polycab).
Key sells of last month
On the flip side, the fund trimmed its exposure in a few names:
- KPIT Technologies: Cut from 1.55 per cent holding in the company to 1.1 per cent.
- Hitachi Energy India: Reduced almost by half (0.79 per cent to 0.35 per cent).
- Bharti Hexacom and Max Healthcare Institute: Minor reductions, likely profit-booking moves rather than a change in outlook.
The overall pattern suggests selective pruning rather than a major portfolio churn.
Portfolio snapshot
Dixon Technologies, Coforge and Trent remain the three biggest holdings in the portfolio, with Eternal (Zomato) now joining the top four.
Perhaps the most striking aspect of the fund’s positioning is its sectoral tilt. Nearly 66 per cent of investor money is concentrated in Technology and Consumer Discretionary stocks, compared to just 24 per cent for the mid-cap fund category on average. This makes the fund relatively aggressive but also shows the team’s conviction that these sectors will continue to outperform.
Should you invest?
Motilal Oswal Mid Cap Fund is clearly a high-conviction, concentrated mid-cap fund. The managers are not afraid to make bold sectoral calls and take significant positions in their top picks, something that has paid off handsomely in the last few years.
But is this fund part of our ‘Best Buy’ list? To find out, head over to Value Research Fund Advisor, our premium recommendation service, where we analyse not just past performance but also portfolio quality, risk levels and consistency before giving a green signal.
Also read: Motilal Oswal Midcap Fund bought 2 new stocks in June
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