Last Updated on April 14, 2026 at 11:05 am
This is a review of Motilal Oswal Multicap 35 Fund. This is a multicap fund that seeks to invest in no more than 35 stocks across market cap and sectors. Thanks to its distributor friendly approach and transfer from its PMS arm, the AUM of this less-than-five year old has quickly swelled to 13,000 plus crores. About 39% of it is in the direct plan (Source AMFI). Let us a take a closer look, not only at Motilal Oswal Multicap 35 Fund, but also the approach of the AMC and its investors.
To be frank, I think Motilal Oswal AMC has a rather brash, bravado-ridden approach to pushing its fund. It has to quickly mature in order to retain AUM, because its investors will not. Have a look at the scheme presentation for this fund.
The impression created – whether knowingly or unknowingly – is that the AMC can pick the “right stocks” and once it does (buying right) it will hold (sit tight). I have seen no other AMC stress so much on the “right stocks” with past returns prominently displayed.
They keep talking about “high conviction” picks and the need to keep the number of stocks in the portfolio low. This means that they would take (relatively) concentrated bets on business that have not yet taken off, but are expected to.
🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥
Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.
👉 New Tool Alert! NaviPlan: A Privacy-Focused Multi-asset Tracker and Goal Planner 👈
There is nothing wrong with this approach. The trouble is that investors much recognise that buying right is not possible all the time and we will know if we are right or wrong in hindsight. When you take concentrated bets and they go wrong, you will have to exit and start all over again. In the meanwhile the NAV of the fund will take a hit. Neither the AMC or its distributors will highlight this possibility to investors – most of whom are young and immature.
Motilal Oswal Multicap 35 Fund: SIP Performance since inception
Look at that huge fall (aka draw down). Again, this is expected from Multicap 35, but cannot expect investors to be prepared.
Motilal Oswal Multicap 35 Fund: Nifty Next 50 and Nifty 100
Motilal Oswal Multicap 35 Fund is benchmarked to Nifty 500, but I think NIfty Next is an appropriate benchmark. The fund has comfortably beat both since inception. However, there is practically no downside protection. The max drawdown for Nifty 500 during this period is 20% and that for the fund is only 1% less. Nifty NExt 50 has a drawdown of -21%.
If we look at the last three-year returns at the funds Morningstar page, the fund 2% more than BSE 500 although so did the category average. My point is that investors should be mentally prepared for this.
Fingerprint analysis
Here use the Fingerprinting visual Tool for Analyzing Mutual Fund Performance and compare monthly mutual fund and index returns and find out where they fall.
Motilal Oswal Multicap 35 Fund vs NIfty 500 TRI
The underperformance is frequent (although not just for this fund).
Motilal Oswal Multicap 35 Fund vs NIfty Next 50 TRI
Again that is decent performance.
Summary
I don’t think there is anything wrong with fund. It is just doing what it say will do. It is the investors mistake to expect this fund to “fall less” than the market. That is not its mandate. As mentioned above, when the fund management restricts the no of stocks it can choose and seeks outperformance based on conviction and concentration things can go wrong.
One can sit right only when one buys right and this cannot happen all the time. SInce some loyal distributor is likely to tag Aashish P Sommaiyaa on twitter to this post, my insignificant two cents to the amc is (1) tone down expectation from all such “focused” funds others the AUM will not “stick” (2) educate investors about the importance of patience.
Investors cannot buy a fund expecting only returns. This is a high-risk, potential high-reward and requires a significant time to perform. So do not choose this unless your needs are over 10 years away. The AMC says it will
endeavour to construct such a portfolio that the product is best suited for medium and long term investment
Please interpret medium term as 10 years.
New investors: If you do not mind a rough ride, then you can consider this fund although IMO you should not. When the going in the markets is good, people talk about how patience is important. When returns evaporate for a few months, then tune changes. Equity may work in the long term but the journey matters.
Existing investors: If you are worried about the fund performance then you should first worry about your investment strategy or the lack thereof. The fund is behaving as it should. You have two choices: either be patient or choose a less volatile fund.
if you want the rainbow, you gotta put up with the rain. – Dolly Parton
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
Use our Robo-advisory Tool to create a complete financial plan! More than 3,000 investors and advisors use this! Use the discount code robo25 for 20% off. Plan your retirement (early, normal, before, and after), plus non-recurring financial goals (such as child education) and recurring financial goals (such as holidays and appliance purchases). The tool helps anyone aged 18 to 80 plan for retirement, plus six non-recurring and four recurring financial goals, with a detailed cash flow summary.
🔥Join our community of 9000+ users! 🔥Avail massive discounts on our courses + freefincal investor circle!
Track your mutual funds and stock investments with our Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds, ETF screeners, as well as momentum and low-volatility stock screeners.
You can follow our articles on Google News
We have over 1,000 videos on YouTube!
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth!
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalised investment advice. We can write a detailed article without mentioning your name if you have a generic question.
About The Author
Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development.
Connect with him via Twitter(X) LinkedIn YouTube
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,500 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market conditions! Watch the first lecture for free! One-time payment! No recurring fees! Lifelong access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Increase your income by getting people to pay for your skills! More than 900 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner seeking more clients through online visibility, or a salaried individual looking for side or passive income, we will show you how to do it by showcasing your skills and building a community that trusts and pays you. (Watch the 1st lecture for free). One-time payment! No recurring fees! Lifelong access to videos!
Our book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting a side income via content writing. It is available at a 50% discount for Rs. 500 only!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy
Freefincal is a News Media organisation dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact Information: To get in touch, please use our contact form. (Sponsored posts or paid collaborations will not be entertained.)Connect with us on social media
Our publications
You Can Be Rich Too with Goal-Based Investing
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
Your Ultimate Guide to Travel
