Motilal Oswal Midcap Regular Reinvestment of Income Distribution cum capital withdrawal INF247L01429

Motilal Oswal Midcap earns an Average Process Pillar rating.

The primary contributor to the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The process is limited by its parent firm's subpar risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.2 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy has tended to hold more growth stocks than others in the Mid-Cap Morningstar Category. But in terms of market capitalization, it is on par with peers. Examining additional factor exposure, the managers have been consistently underweighting yield compared with the Morningstar Category peer over recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide consistent income payments, they may cut payouts if their earnings decline. Different from its historical appetite, however, the Yield factor was in line with the Morningstar Category average in recent months. This strategy has had more exposure to high-momentum stocks over its peers in recent years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This contributes to a higher-risk, higher-reward approach. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in technology and consumer cyclical relative to the category average by 27.9 and 3.5 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and basic materials, underweight the average by 19.1 and 6.9 percentage points of assets, respectively. The strategy owns 26 securities and is quite concentrated. More concretely, 53.7% of the strategy's assets are housed within the top 10 holdings, compared to the category’s 23.5% average.