Motilal Oswal Flexi Cap Fund, which has been a part of our ‘Best Buy’ recommendation, is now being put on ‘Hold’. The fund made headlines in the years since its launch with its blockbuster performance, delivering outstanding returns for its investors. However, in the last few years, it has not been able to keep up to its reputation and has seen its performance drop significantly. It has now started to show in its long-term returns numbers as well. Though the fund's performance has been seeing a downwards trend for quite some time now, its long-term performance managed to stay well above its peers and benchmark until 2017. Post that, the fund has neither been able to keep up with its peers nor its benchmark (on a calendar year basis). The fund has underperformed despite being heavily invested in stocks from the universe of top 100 (80–90 per cent of its portfolio) for most of 2018 and 2019. This has been the period in which large-cap stocks have led the market rally. But the fund, however, didn’t benefit as much despite being invested in the same universe. From the time the fund faced its very first severe downturn in early 2020, the fund has not been able to recover and keep up with its category peers, let alone the benchmark, which has had a prodigious rally following the slump. This has also dragged down its long-term performance of five-year trailing returns considerably. In 2020, the fund missed out on the big rally in the pharma sector as it barely invested in the sector. This is
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