Motilal Oswal Large and Midcap Fund for Better Growth Invest Now

The Motilal Oswal large and midcap fund which has a mix of both large and midcap companies in equity oriented mutual fund scheme.

What Is Motilal Oswal Large and Midcap Fund?

The Motilal Oswal large and midcap fund’s objective is to give the investors exposure to the large-cap and mid-cap companies.

Why Consider a Large and Midcap Fund?

Why not opt for a large and midcap fund as opposed to a fund that’s limited to one?

It’s diversification that holds the key.

Large cap companies may have some of the traits of a better established company and mid cap companies may offer exposure to an expanding company. The two can be used in combination to develop a portfolio that has different growth drivers.

A large and midcap fund has a similar ideology but has a different investment philosophy as it invests across two segments of equity.

But diversification doesn’t mean that there is no market risk. The price of an equity investment may go up or down in the market and because of the company’s performance.

Key Features of Motilal Oswal Large and Midcap Fund

It’s important to understand the relevance of Motilal Oswal large and midcap fund in your investment portfolio before investing.

It has some of the following key features:

• It doesn’t have to be the stock of the big or medium-sized company
• Equity-oriented investment approach
• Professional portfolio management
• Considering diversification within companies and potentially sectors
• Growth-oriented investment potential
• Market-linked returns
• There was an appropriate consideration of investors with a longer investment time horizon

Equity-Oriented Investment Approach

Equity is at the heart of such a strategy of investment.

This provides investors an opportunity to be part of the growth of businesses, as well as the growing economy. It also has the potential to have varying investment value.

There may be a benefit to your portfolio when the market is up. The NAV may be reduced when prices go down in the markets.

It’s just a part of the equity investing process.

Diversification Across Market Segments

A diversified way to invest is by investing across the large and mid-cap companies to not have to rely on only one market-cap.

Now let’s say that one segment is doing a bit slower and another is doing a bit better. A diversified portfolio across various asset classes may prove more effective than a portfolio that invests entirely in a single asset class.

But, diversification does not mean that you won’t incur losses.

Growth Option for Wealth Creation

Investors who want to keep their money invested in the scheme usually choose the Growth option instead of opting for periodic dividends under the IDCW option.

This can help to facilitate long-term investors’ reinvestment approach.

Professional Fund Management

One of the other benefits of mutual funds is that they’re professionally managed.

The fund management team carries out the research on companies, decides upon the opportunities and handles the portfolios according to the fund’s investment strategy in place of individual investors who would have to keep track of the dozens of companies that make up the fund.

Motilal Oswal Large and Midcap Fund Direct Growth vs Regular Plan Growth

The underlying scheme and investment objective of the two plans Motilal Oswal large and midcap fund direct growth and regular plan growth can be same, but the cost structure is different.

Distribution and Intermediary Costs

Regular Plan is the investor normally invests through a distributor, or intermediary.

The distributor’s services are provided and he/she receives compensation according to the applicable structure of expenses of the mutual fund.

With a Direct Plan, investors make the investment through a distributor, with the exception of many that do not.

This difference may result in the volatility of expense ratios resulting in varying NAV’s from time to time.

Expense Ratio and Long-Term Impact

Expense ratio should be considered because the costs can easily have a long-term impact on returns.

Likewise, traders need to take a close look at the expense of Regular Plans and Direct Plans prior to making a decision which of them to select.

How the Fund Can Fit Into a Long-Term Portfolio

If investors are looking to have an equity exposure in the various market caps then they can consider Motilal Oswal large and midcap fund.

Wealth Creation Through Equity Exposure

Investing for equity can provide long-term wealth creation opportunity as investors are a part of the growth of a business.

An increasing company revenue and profit, expansion of activity or improvements of the competitive position can cause the company’s market value to rise in time.

However, markets don’t always go up.

Significant rallies and drops can occur and there may be times of confusion.

The Role of Compounding

The term “compounding” can be said to mean “returns earning returns.

Now, let’s assume that you invest and make money from that investment and then keep the money invested. Having a foundation of investments will allow future investments to be built on the previous investment value.

This effect can have a more significant impact based on length of time in the investment.

Compound, however does not eliminate market risk. A drop in the values of the underlying investments will also result in a decrease in the value of the portfolio.

Why Time Matters in Equity Investing

If you give your investment enough time to go through different market cycles, it will be best to invest in equity.

In the same way, investors would not want to make hasty choices in the market because of short-term fluctuations in the market.

Is Motilal Oswal Large and Midcap Fund Suitable for You?

The Motilal Oswal large and midcap fund could be suitable for investors with a diversified portfolio who are able to withstand fluctuations in the equity-markets.

The Regular Plan Growth option might be best for those who would like to invest through a distributor or intermediary and would like the Growth structure.

Meanwhile, investors should also consider the Regular Plan of the fund vis-à-vis the Motilal Oswal large and midcap fund direct growth, especially in terms of costs and support that they require.

Not all are the same and there is no “best” plan.

The best one is the one that you are comfortable with, have the goals for and can take the risk along with the investment time frame.

Conclusion

The Motilal Oswal large and midcap fund is a mutual fund that provides an opportunity to the investors to invest in both large and medium cap stocks less than one umbrella.

Additionally, you can compare the Regular Plan with the Motilal Oswal large and midcap fund direct growth option, to gain insight into which plan is better for you.

FAQs

1. Is Motilal Oswal Large and Midcap Fund suitable for long-term investment?

Ans) Investors can choose this option when they want to invest in a large-cap and mid-cap portfolio for the long term and can accept market volatility. The fund’s risk and volatility attributes should be consistent with your investment time frame and risk tolerance.

2. What is the difference between the Regular Plan Growth and Direct Growth options?

Ans) The cost structure of the two plans can be the same, but they can be different. Both plans may have the same scheme and objective, but can have different cost structures. The Regular Plan usually includes a distributor or intermediary whereas the Direct Plan does not apply distributor commissions like it does with the Regular Plan. It is important for investors to compare the expense ratios of the different funds, and to determine if they will need any help from an intermediary.

3. Does the Growth option pay dividends regularly?

Ans) This will not typically be the case with the Growth option where the gains are distributed periodically as IDCW. Gains, however, continue to be kept in the scheme and the NAV is merely the value of the investments, less the expenses of the scheme and any market fluctuations.

4. Does the fund carry market risk?

Ans) Yes. The fund invests in stocks, so stock market fluctuations, economic conditions, company performance, and other factors may cause its NAV to change. Investors need to be aware of the risks prior to investing.

5. How should I evaluate this fund before investing?

Ans) The investment objective, portfolio composition, level of risk, expense ratio and historical performance are important factors to consider first. Now take into consideration your own financial needs, time horizon and risk tolerance. Always do not go by a single indicator when you make your decision.