Ask Morningstar: To exit or not to exit?

By Kavitha Krishnan |  21-08-22 | 
 

Should I get out from Motilal Oswal Flexicap fund? I have been investing in it since the last 4 years and personally want to continue but would like to know expert's opinion.

The Motilal Oswal Flexicap fund has been underperforming its peers since 2018. However, it’s important to understand the reasons for this underperformance. Despite the fund’s focus on large cap stocks, markets have been volatile since 2019, with a few sectors largely driving the market upwards. At a fund level, we’ve noticed that a few stocks like Maruti Suzuki and AU Small Finance Bank have been impacting the fund’s performance in 2021 and 2022.

Prior to 2017, the fund had been performing quite well as compared to its peers. However, we take comfort in the fact that the fund has stood grounded to it investment philosophy despite its underperformance.

We would urge you to look at the fund in terms of it fit into your portfolio. If the fund makes a cut from an asset allocation and diversification perspective, you could continue to remain invested in the fund rather than making a mark-to-market loss on the fund. However, if you are looking at continuing to invest into this fund, we would also urge you to consider other funds that could make the cut into your portfolio.

Related Reading:

Don't be hasty to exit because of underperformance

Do you need 2 flexi-cap funds in your portfolio?

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Articles authored by Kavitha Krishnan

Registered readers can post their queries by accessing the Ask Morningstar tab. Our team will answer SELECT queries relating to mutual funds, portfolio planning and personal finance. While we provide broad guidelines, we suggest you consult a financial adviser before making investment decisions.

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