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It is time to distinguish between consistency and alpha” (the note’s own framing

Motilal Oswal AMC October 2026 Dear Investor The Motilal Oswal October 2026 Dear Investor note: FPIs may take a while to return, and with growth stronger outside the large cap indices, consistency with the Nifty may no longer travel with better relative performance. Motilal Oswal October 2026: consistency versus alpha This month’s Motilal Oswal October 2026 Dear Investor note comes from Prateek Agrawal at Motilal Oswal Mutual Fund. Read alongside the DSP Netra October edition and the Motilal Oswal September outlook. WHY FPIs ARE SELLING Rates · Rupee · Growth Elsewhere WHAT HAS IMPROVED EM Valuations · Record Reserves THE DISTINCTION Consistency vs Alpha OVERALL OUTLOOK A Lot in the Price Summary The Motilal Oswal October 2026 note covers FPI selling, the broader market’s higher earnings growth compared with large cap indices, and the possible implications for market performance. FPIs are selling emerging markets and it might be a while before they become buyers. Growth outside the major indices has been stronger than growth within them — so, Motilal Oswal says, it is time to distinguish between consistency and alpha. The detail FPIs are selling emerging markets; it might be a while before they become buyers Rates rose globally, including in Japan and the US, increasing the cost of capital and reducing outward flows. A weak rupee could affect FPI returns; Motilal Oswal believes currency stability is needed before FPIs reconsider India. Higher oil prices are another risk. Motilal Oswal believes FPIs came for growth and remain heavily invested in earlier leaders such as IT services and private banks, where growth has moderated. Newer growth leaders are smaller and may not absorb those outflows. Global AI opportunities and large upcoming US IPOs also compete for capital. There are some positives India’s valuations have improved relative to other emerging markets. Large US-dollar deposits raised by banks have helped lift forex reserves to a record and supported confidence. The AI trade may be becoming more expensive and uncertain. As adverse factors reverse, India could regain favour. The overall impact of duties may be limited outside specific sectors, although volatility could persist. It is time to distinguish between consistency and alpha What the AMC says it was missing was this distinction during the 2008 to 2020 period: the Nifty led earnings growth, so constructs that stayed close to the Nifty provided both consistency and strong relative performance. Now that the broader market is growing faster, the two may not necessarily occur together. China plus one after COVID let governments protect domestic manufacturing, there was a thrust to Make in India, and new spaces emerged — digital, EVs, renewables, capital market participants — most of whose companies did not exist 10 years ago. Constructs that move away from the index could have a greater chance of stronger outcomes over a period of time, though their consistency relative to the index may differ. What this means for investors The note’s own outlook The note’s own outlook — the AMC’s views, not recommendations: There is a lot in the price. Uncertainties would remain, but investors may learn to live with them. Domestic focused businesses, and those with a US manufacturing base, may be relatively less impacted. Software and realty may stabilise as AI-related jobs emerge and AI companies seek returns on their investments. Newer spaces continue to emerge and may present alpha opportunities; since the broad market keeps growing faster, the AMC believes it continues to be time for alpha. The Motilal Oswal October 2026 Dear Investor note sits alongside the DSP Netra October edition and the Motilal Oswal September outlook. For the underlying regulatory framework, see the Association of Mutual Funds in India. Equity Motilal Oswal AMC Dear Investor FPI Flows Earnings Growth Alpha October 2026 Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully. The views expressed are those of the AMC and do not constitute investment advice.

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The distinction between consistency and alpha — because growth is now higher outside of large cap indexes

September 15, 2026 / Leave a Comment / Fundspeak / Alpha, Earnings, equity, equity market outlook, Index investing, MarketOutlook, Motilal Oswal Mutual Fund / fundyantra.com

Motilal Oswal Mutual Fund September 2026 Market Outlook The Motilal Oswal market outlook September 2026 argues this is a time when investors would have to understand the distinction between consistency and alpha — because growth is now higher outside of large cap indexes. Motilal Oswal market outlook September 2026: the consistency-vs-alpha distinction This month’s Motilal Oswal market outlook September 2026 briefing comes from Motilal Oswal Mutual Fund. Read alongside the Kotak September outlook and the DSP Netra September foundational edition. CONSISTENCY Close to Index ALPHA Excess Over Benchmark WHERE GROWTH IS Outside Large Caps Q1 EARNINGS Good, Across the Board Summary The Motilal Oswal market outlook September 2026 opens on a definitional distinction. Consistent returns are generally associated with performance closer to the relevant index returns; alpha refers to excess return over a benchmark. This edition is about why, now that growth is higher outside of large cap indexes, the two need separating. The detail The difference between consistency and alpha Consistent performance is achieved with constructs close to index and being very index aware. Active ratios may be high, but the construct could still be close — a stock held outside the index but in the same sector. Up until FY20 and FY21 large caps delivered better earnings growth versus small and midcaps over most periods since the start of the century, and outcomes from constructs away from the index were not satisfactory. Now growth is higher outside, so such constructs may provide greater opportunity over a period of time — though they can have different risk characteristics. FPI holdings have declined across the board but remain meaningful at close to 20% in large caps. FPIs are selling lower growth index heavy sectors, which could create opportunities for growth oriented investors to generate alpha. Flows appear to be following earnings. Takeaways from Q1 result season The MO universe excluding OMCs grew sales, EBITDA and PAT by 18%, 15% and 22% year on year, led by BFSI at 19%; metals grew 57% and oil and gas ex-OMCs 54%. Airlines, cement and OMCs dragged the aggregates. The broad market recorded higher earnings growth than large caps: large caps grew 21%, midcaps 23% and small caps 31%. Risks at this juncture, and the opportunities that arise out of the solutions Many of the risks of the past period seem to be getting addressed — oil below $90, FPI flows more neutral, the rains have come, reserves past $700 billion, the market still below February 2026 levels and valuations defendable. Key risks now include the large supply of paper, though some issuances have been withdrawn; the war in the Middle East seems to be elongating and preventing a further fall in oil prices; and trade sanctions seem to be a continuous threat. The only way to insulate a country against the oil price increase is to electrify with domestic fuel sources — solar, wind and hence BESS, coal, biomass. Forex stress galvanizes attention on import substitution. What this means for investors Overall outlook The AMC’s closing points, and ours: It believes much of the uncertainty is already reflected in market prices. Uncertainties will remain, but investors may learn to navigate them. Domestic focused businesses and those with a US manufacturing base may be relatively less exposed to certain risks. It thinks equities continue to remain an asset class with potential for long-term growth while being volatile, and newer spaces continue to provide opportunities for alpha. The Motilal Oswal market outlook September 2026 briefing sits alongside the Kotak September outlook and the DSP Netra September foundational edition. For the underlying regulatory framework, see the Association of Mutual Funds in India. Equity Motilal Oswal Mutual Fund Market Outlook Alpha Index Investing Earnings September 2026 Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully. The views expressed are those of the speaker and do not constitute investment advice.

Alpha, Earnings, equity, equity market outlook, Index investing, MarketOutlook, Motilal Oswal Mutual Fund

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