Motilal Oswal Midcap Fund's Impressive Performance

India's Motilal Oswal Asset Management Co. is anticipating a surge in shares related to discretionary goods and manufacturing, driven by the country's growing demand for non-essential items and the government's manufacturing expansion push. Chief Investment Officer Niket Shah is focusing on lower-priced non-essential goods like jewelry and apparel, expecting increased consumer spending. Additionally, he is exploring opportunities in India's expanding electronic component sector.

The Motilal Oswal Midcap Fund has delivered approximately 63% returns over the past 12 months, significantly outperforming its benchmark's 33% gain, making it the top mutual fund in India. Shah, who oversees more than $7 billion, expects meaningful changes to the income tax code that will benefit consumers, despite high food inflation.

Sector-Specific Strategies and Future Prospects

Shah's strategy of identifying sector inflection points and timely exits has significantly contributed to the fund's performance. Investments in telecom companies like Bharti Airtel Ltd., Indus Towers Ltd., and Vodafone Idea Ltd., as well as technology stocks such as Persistent Systems Ltd. and Zomato Ltd., have added to the gains. In electronics manufacturing, production-linked incentives are expected to boost the sector as India aims to expand its role in global supply chains.

Shah also noted a potential shift in government policy towards allowing Chinese firms to set up joint ventures in India, which could leverage Chinese technology and Indian manufacturing to achieve greater scale. As of November 31, Motilal held shares in Kalyan Jewellers India Ltd., Trent Ltd., and Dixon Technologies India Ltd., a contract manufacturer for Samsung Electronics Co.