Quant Mid Cap Fund vs Motilal Oswal Midcap Fund: Which Midcap Fund is Best for Portfolio in 2024?

Invest with S K Singh

28 Aug 202418:13

Summary

TLDRThis video offers a comprehensive analysis of two top mid-cap funds in India: Quantum Mid-Cap Fund and Motilal Oswal Mid-Cap Fund. It compares their long-term investment performance, risk-adjusted returns, portfolio overlap, sector allocation, and management stability. The analysis suggests that while Motilal Oswal Mid-Cap Fund has shown better returns over the past three years, Quantum Mid-Cap Fund offers better risk-adjusted returns in the long term. The video also provides investment strategies for mid-cap funds, advising against lump sum investments due to high valuations and recommending systematic investment plans.

Takeaways

📈 The video compares two top mid-cap funds: Quantum Mid Cap Fund and Motilal Oswal Mid Cap Fund.
🔍 The analysis covers a detailed examination of both funds' performance over various time frames.
🏆 Motilal Oswal Mid Cap Fund outperforms Quantum Mid Cap Fund in calendar year returns over the past 11 years.
📊 In terms of quarterly returns, both funds have shown similar performance with slight edges to each at different times.
💹 Motilal Oswal Mid Cap Fund has demonstrated better wealth creation for investors over the long term.
📉 The rolling returns analysis shows that Motilal Oswal Mid Cap Fund has performed better in 1-year rolling returns, while Quantum Mid Cap Fund has shown better performance in 3-year and 5-year rolling returns.
📊 The compound annual growth rate (CAGR) analysis reveals that Quantum Mid Cap Fund has delivered better compound returns over the past 9 years.
💰 When comparing the returns of ₹1000 invested 5 and 10 years ago, both funds show significant growth, with Quantum Mid Cap Fund providing slightly higher returns in the 5-year comparison.
📈 The portfolio analysis shows that the two funds have very little overlap in their portfolio holdings.
🔄 Quantum Mid Cap Fund has a higher portfolio turnover ratio, indicating more frequent changes to the portfolio compared to Motilal Oswal Mid Cap Fund.
📉 The risk analysis shows that Motilal Oswal Mid Cap Fund has provided better results in terms of maximum drawdown over the past 3 years, but Quantum Mid Cap Fund has shown better performance over 5 years and 10 years.

Q & A

Which two mid-cap funds are discussed in the script?
-The two mid-cap funds discussed are Quantum Mid Cap Fund and Motilal Oswal Mid Cap Fund.
What is the main focus of the video script?
-The main focus of the video script is to analyze and compare the performance of Quantum Mid Cap Fund and Motilal Oswal Mid Cap Fund over various parameters to determine which is a better investment option for long-term.
What is the conclusion regarding the total returns over the past 11 years?
-Over the past 11 years, Motilal Oswal Mid Cap Fund has shown better performance compared to Quantum Mid Cap Fund based on total returns.
How does the performance differ in terms of calendar year returns?
-In calendar year returns, Motilal Oswal Mid Cap Fund outperformed Quantum Mid Cap Fund in eight out of eleven years, while Quantum Mid Cap Fund outperformed in three out of eleven years.
What is the portfolio turnover ratio for Quantum Mid Cap Fund and Motilal Oswal Mid Cap Fund?
-Quantum Mid Cap Fund has a portfolio turnover ratio of 342%, indicating that it changes its portfolio more than three times in a year. Motilal Oswal Mid Cap Fund has a portfolio turnover ratio of almost half, meaning it changes its portfolio less frequently.
Which fund has a higher allocation to equity assets?
-Quantum Mid Cap Fund has a higher allocation to equity assets compared to Motilal Oswal Mid Cap Fund.
How do the sector allocations of both funds compare?
-Quantum Mid Cap Fund has higher allocations in sectors like industrials, materials, healthcare, energy, and utilities, while Motilal Oswal Mid Cap Fund has higher allocations in technology, consumer discretionary, financial, and real estate sectors.
What is the observation regarding the portfolio overlap between the two funds?
-The portfolio overlap between the two funds is very low, with single-digit percentages, indicating that the common stocks between the two funds are minimal.
Which fund is considered more aggressive based on the analysis?
-Motilal Oswal Mid Cap Fund is considered more aggressive compared to Quantum Mid Cap Fund based on the analysis.
What is the advice for investment strategy in the current market situation for mid-cap funds?
-In the current market situation, it is advised to invest in SIP mode and avoid lump sum investments in mid-cap funds due to high valuations. It is also recommended to increase the SIP amount periodically.
What is the final recommendation for investors based on the analysis?
-For aggressive investors seeking higher returns, Motilal Oswal Mid Cap Fund is recommended, while for those seeking better risk-adjusted returns, Quantum Mid Cap Fund is a better investment option.

Outlines

00:00

📈 Comparison of Midcap Funds

The paragraph discusses the comparison between two midcap funds: Quant Midcap Fund and Motilal Oswal Midcap Fund. It emphasizes the need to stay tuned to the video for a comprehensive analysis based on various parameters to determine which fund is better for long-term investment. The analysis will cover consistent performance over the years, risk-adjusted returns, and wealth creation for investors. The video will also provide investment strategies for midcap funds in the current market situation.

05:00

📊 Detailed Return Analysis

This section delves into the return analysis of the two funds, comparing their calendar year returns and quarterly returns over the past 32 quarters. It also discusses the total returns over the past 11 years and 32 quarters, highlighting the performance of each fund. The analysis shows that while Quant Midcap Fund has outperformed Motilal Oswal Midcap Fund in certain periods, Motilal Oswal Midcap Fund has shown better performance in others. The paragraph also introduces rolling returns and compounded annual returns (CAGR) as part of the analysis.

10:01

💼 Portfolio Analysis

The paragraph focuses on the portfolio analysis of the two midcap funds, examining portfolio overlap, portfolio turnover ratio, asset allocation, number of stocks, market capitalization allocation, and sector allocation. It points out that the portfolio overlap between the two funds is minimal, and there are differences in their investment strategies and sector allocations. The analysis also touches on the aggressiveness of the funds and sets the stage for a risk analysis in the subsequent paragraphs.

15:02

🏦 Risk and Management Analysis

This part of the script discusses the risk analysis of the two funds, including maximum drawdown, standard deviation, Sharpe ratio, and alpha. It compares the stability of the fund management and the tenure of the fund managers. The analysis concludes that Motilal Oswal Midcap Fund has performed better in the short term, while Quant Midcap Fund has shown better risk-adjusted returns in the long term. The paragraph also provides investment advice, suggesting that investors should avoid lump-sum investments in midcap funds due to high valuations and recommends systematic investment instead.

Mindmap

Keywords

💡Midcap Funds

Midcap Funds are a category of mutual funds that invest in mid-sized companies, known as midcap stocks. These funds aim to provide capital appreciation by investing in equities of mid-sized companies that have the potential for high growth. In the video, the comparison between Quantum Midcap Fund and Motilal Oswal Midcap Fund, two of the best midcap funds, is discussed to determine which one is better for long-term investment.

💡Long-term Investment

Long-term investment refers to committing money to financial instruments like stocks, bonds, or mutual funds with the expectation of holding them for an extended period, typically more than a year. The video emphasizes the importance of evaluating the performance of midcap funds over the long term to understand which fund creates better wealth for investors.

💡Calendar Year Returns

Calendar Year Returns are the profits or losses that an investment generates over a calendar year. The script mentions comparing the calendar year returns of the two midcap funds from January to December over several years to see how they have performed annually.

💡Quarterly Returns

Quarterly Returns refer to the financial performance of an investment over a three-month period. The video script discusses analyzing the last 32 quarters of the funds to determine which fund has provided more consistent returns on a quarter-by-quarter basis.

💡Rolling Returns

Rolling Returns are calculated by assessing the performance of an investment over a specific time frame, such as one year, three years, or five years, for every period within a given range. In the context of the video, rolling returns are used to evaluate how the funds have performed over the past 9 years on a year-to-year basis.

💡Compounded Annual Growth Rate (CAGR)

CAGR is the rate of return that would be required for an investment to grow from its initial to its ending value over a certain period, assuming the profits were reinvested at the end of each year of the investment's lifespan. The video uses CAGR to compare how well each fund has created wealth for its investors over the past 9 years.

💡Risk-adjusted Returns

Risk-adjusted Returns take into account the risk associated with an investment and adjusts the returns accordingly. The video aims to find out which fund has provided better risk-adjusted returns, indicating that the fund has generated higher returns for the level of risk it took on.

💡Sharpe Ratio

The Sharpe Ratio is a measure of the excess return (or risk premium) per unit of risk in an investment. It is used to compare the performance of investments with different risk levels. In the video, the Sharpe Ratio is used to evaluate which fund has generated better excess returns per unit of risk over the past 3, 5, and 10 years.

💡Alpha

Alpha in finance represents the excess return of an investment relative to the return of a benchmark index. A positive alpha indicates that the investment has performed better than the benchmark, while a negative alpha indicates underperformance. The video compares the alpha of the two funds to determine which has generated higher excess returns over the years.

💡Portfolio Turnover Ratio

The Portfolio Turnover Ratio indicates how frequently a fund's portfolio holdings are bought and sold. A high turnover ratio, like the one mentioned for Quantum Midcap Fund, suggests that the fund is actively traded, which can impact performance and costs. The video uses this ratio to compare the trading activity of the two funds.

💡Asset Allocation

Asset Allocation refers to the distribution of investments across different asset classes, such as equities, fixed income, and cash. The video compares the asset allocation of the two funds, particularly their allocation to equity, to understand their investment strategies and risk profiles.

💡Sector Allocation

Sector Allocation is the process of distributing investments across various sectors of the economy, such as technology, healthcare, or finance. The video script mentions analyzing the sector allocation of the two funds to understand which sectors they have invested in more heavily and how this has affected their performance.

Highlights

Comparison of two top mid-cap funds: Quantum Mid Cap Fund and Motilal Oswal Mid Cap Fund

Analysis of long-term investment performance of both funds

Calendar year returns comparison from 2014 to August 2024

Motilal Oswal Mid Cap Fund outperforms Quantum Mid Cap Fund in calendar year returns

Total returns comparison over the last 11 years

Quarterly returns analysis of the last 32 quarters

Consistency in returns over the last 32 quarters

Rolling returns analysis over the past 9 years

Compounded annual growth rate (CAGR) comparison over the last 9 years

Comparison of SIP returns for the last 5 and 10 years

Consistency in SIP investment performance over the years

Portfolio overlap between the two mid-cap funds is minimal

Portfolio turnover ratio comparison

Asset allocation comparison in equity, cash, and other classes

Number of stocks and market cap allocation comparison

Sector allocation comparison highlighting differences in industry focus

Risk analysis parameters including maximum drawdown and standard deviation

Sharpe ratio comparison for risk-adjusted returns

Alpha comparison against benchmark index performance

Fund management stability and experience of fund managers

Asset under management (AUM) and expense ratio comparison

Final verdict on which fund is a better investment option

Recommendation on investment strategy in the current market situation