Motilal Oswal Midcap Fund vs Nippon India Growth Fund: The Indian mid-cap segment has emerged as a beacon of growth and opportunity for investors in 2024. With its unique blend of stability and potential for exponential returns, this sector has captivated the attention of investors looking for a slice of India’s economic success. Mid-cap companies, often characterized by their agility, innovation, and ability to scale rapidly, have become vital contributors to India’s economic engine.
In this article, we dive into two standout mid-cap mutual funds Motilal Oswal Midcap Fund and Nippon India Growth Fund to help you decide which fund aligns with your investment goals. Both funds are giants in the mid-cap category, each boasting unique strategies and performance metrics that cater to different types of investors.
Share Market Trading Methods: सपनों की उड़ान या जोखिम का खेल?
Understanding Mid-Cap Mutual Funds: Motilal Oswal Midcap Fund vs Nippon India Growth Fund
Mid-cap companies are those that have reached a level of maturity but still possess the potential to scale to new heights. Investing in mid-cap mutual funds allows investors to tap into companies that are leaders in niche markets or are on their way to becoming large-cap giants. The Nifty Midcap 150 Index, a benchmark for this segment, has consistently delivered robust returns, often outperforming its large-cap counterparts.
Mid-cap funds are not just about growth they’re about the promise of innovation, market responsiveness, and long-term wealth creation. However, they are not without risks. Volatility and market cycles can significantly influence their performance. Hence, a disciplined, long-term approach is critical when investing in these funds.
Motilal Oswal Midcap Fund: A High-Conviction Player
Launched in February 2014, the Motilal Oswal Midcap Fund is an open-ended equity scheme with an AUM of ₹22,897.62 crores (as of November 30, 2024). The fund follows the philosophy of “Buy Right, Sit Tight,” emphasizing high-quality stock selection and long-term holding.
Key Features:
- Investment Style: Focuses on mid-cap companies with high growth potential through a bottom-up stock selection approach.
- Philosophy: Concentrated portfolio reflecting high conviction picks.
- Portfolio Composition:
- 66.76% allocated to mid-caps.
- 31.34% in large-caps for stability.
- Minimal small-cap exposure at 1.28%.
Top Holdings (as of November 30, 2024):
- Polycab India Ltd. (9.96%)
- Coforge Ltd. (9.86%)
- Kalyan Jewellers India Ltd. (9.65%)
- Zomato Ltd. (9.47%)
- Persistent Systems Ltd. (7.74%)
The fund’s concentrated approach reflects its high conviction in select winners, making it a powerful choice for investors with a higher risk appetite.
Performance:
Motilal Oswal Midcap Fund consistently outshines its peers and the benchmark across time horizons. Its CAGR (Compound Annual Growth Rate) over the past decade stands at 23.03%, significantly above the Nifty Midcap 150 TRI benchmark and category averages.
| Time Period | CAGR |
|---|---|
| 1 year | 60.45% |
| 3 years | 37.09% |
| 5 years | 31.00% |
| 10 years | 23.03% |
Nippon India Growth Fund: A Diversified Contender
A veteran in the mid-cap space, the Nippon India Growth Fund was launched in October 1995 and currently holds an AUM of ₹34,583.63 crores (as of November 30, 2024). Known for its diversification, this fund combines mid-cap exposure with opportunities in small-cap and large-cap stocks.
Key Features:
- Investment Style: Balances top-down and bottom-up approaches for a well-rounded portfolio.
- Philosophy: Diversified portfolio with sectoral breadth to manage risk.
- Portfolio Composition:
- 65.89% in mid-caps.
- 17.12% in large-caps.
- 12.58% in small-caps.
Top Holdings (as of November 30, 2024):
- Power Finance Corporation Ltd. (2.86%)
- Persistent Systems Ltd. (2.86%)
- Cholamandalam Financial Holdings Ltd. (2.60%)
- Fortis Healthcare Ltd. (2.53%)
- Varun Beverages Ltd. (2.26%)
The fund’s broad diversification makes it an appealing choice for investors seeking a balanced risk-return profile.
Performance:
The fund has delivered strong returns across all time frames, with a 10-year CAGR of 20.80%. While slightly behind Motilal Oswal in aggressive growth, it maintains consistent performance, especially during volatile markets.
| Time Period | CAGR |
|---|---|
| 1 year | 53.33% |
| 3 years | 29.23% |
| 5 years | 28.66% |
| 10 years | 20.80% |
Comparative Analysis: Motilal Oswal vs. Nippon India Growth
1. Risk and Volatility:
Motilal Oswal Midcap Fund exhibits higher volatility with a Standard Deviation of 16.83, compared to Nippon India Growth Fund’s 15.88. However, it compensates with better risk-adjusted returns, as evidenced by a Sharpe Ratio of 0.46 and a Sortino Ratio of 1.02.
2. Asset Allocation:
Motilal Oswal leans toward a concentrated mid-cap strategy, while Nippon India Growth adopts a diversified approach. This divergence makes Motilal Oswal suitable for aggressive investors, while Nippon India Growth caters to those seeking stability with growth.
3. Expense Ratios:
- Motilal Oswal Midcap Fund:
- Direct Plan: 0.57%
- Regular Plan: 1.62%
- Nippon India Growth Fund:
- Direct Plan: 0.79%
- Regular Plan: 1.59%
While Motilal Oswal offers a slight edge in expense ratios for direct investors, the difference in regular plans is negligible.
Which Fund Should You Choose?
Motilal Oswal Midcap Fund:
Ideal for investors seeking high growth potential through a concentrated portfolio. Its philosophy of picking quality stocks and holding them long-term makes it a solid choice for those with a high-risk appetite and a long investment horizon.
Nippon India Growth Fund:
Better suited for moderately aggressive investors who prefer diversification to mitigate risk. It offers a balanced portfolio with exposure to mid-cap, large-cap, and small-cap stocks, making it a safer bet during volatile times.
Are Mutual Funds the Favorite Option of Risk-averse Investors?
Final Thoughts: Motilal Oswal Midcap Fund vs. Nippon India Growth Fund
The mid-cap segment is a gateway to India’s growth story, driven by innovation, infrastructure development, and domestic demand. Both Motilal Oswal Midcap Fund and Nippon India Growth Fund offer incredible opportunities to tap into this dynamic space. Your choice depends on your risk appetite, financial goals, and investment horizon.
Invest in mid-cap funds with patience, a long-term perspective, and regular performance monitoring. Remember, while past performance is not a guarantee of future returns, the right strategy can help you navigate the ups and downs of the market to achieve your financial dreams.
2 thoughts on “Motilal Oswal Midcap Fund vs Nippon India Growth Fund: A Comprehensive Comparison of Mid-Cap Titans”