Motilal Oswal Private Wealth (MOPW) has advised investors to consider lump sum investments in Hybrid and Large-Cap funds, citing recent market corrections that have pushed large-cap valuations below their 10-year average.
This recommendation aligns with the firm’s strategic outlook as the Indian equity markets undergo consolidation, influenced by global economic uncertainties, US tariffs, and a strong dollar. “Given the current market phase, a cautious yet balanced investment approach is advisable,” the report emphasized, urging investors to align their strategies with their individual risk appetites.
Investment Strategy Amid Market Volatility
In its March 2025 Alpha Strategist report, MOPW stressed the importance of strategic decision-making in the current volatile landscape. While advocating for lump sum investments in Hybrid and Large-Cap funds, the firm suggested a more staggered approach for Flexi, Mid, and Small-Cap funds over the next six months.
This phased investment approach could be accelerated if market corrections deepen. Despite recent pullbacks, Mid and Small-Cap stocks continue to trade at a premium relative to their long-term averages.
The report highlighted that the correction has brought large-cap valuations—particularly in the Nifty 50 index—below their 10-year average on a one-year forward price-to-earnings (PE) basis. In contrast, Mid and Small-Cap valuations remain elevated, indicating uneven pricing adjustments across market segments.
Broader Economic Outlook
From a macroeconomic perspective, MOPW noted that India’s economy remains stable, supported by recent government initiatives aimed at boosting consumption and growth. However, corporate earnings for Q3 of FY25 have failed to significantly improve market sentiment.
The firm anticipates that greater clarity on economic headwinds will emerge in the first half of the year and advises investors to exercise patience and make selective equity allocations. This advisory comes at a time when the Indian market is experiencing consolidation amid external economic pressures.
Performance of Large-Cap Mutual Funds
According to PL Wealth, the wealth management arm of PL Capital, the Large Cap Mutual Funds category—comprising 32 schemes with a total Assets Under Management (AUM) of ₹3,38,637 crore—delivered a modest 3.08% return over the past year. However, the category witnessed a 3.86% decline in the last month and a 12.22% drop over the past six months.
Among Large-Cap funds, the Motilal Oswal Large Cap Fund-Reg(G) stood out, delivering an impressive 20.06% return over the past year. In the Large and Mid-Cap category, the Invesco India Large & Mid Cap Fund(G) yielded 8.85% returns.
In the Flexi Cap Funds category, the Motilal Oswal Flexi Cap Fund-Reg(G) led with a 13.67% return, benefiting from Niket Shah’s expertise and an AUM of ₹11,171.69 crore. Meanwhile, in the Mid-Cap category, the Motilal Oswal Midcap Fund-Reg(G) delivered the highest returns at 16.62%, with an AUM of ₹23,703.68 crore.
This strategic investment guidance reflects MOPW’s approach to navigating market volatility, balancing risk, and maximizing opportunities across different equity segments.
