Union ELSS Tax Saver Fund Growth INF582M01302

Union ELSS Tax Saver Fund earns an Average Process Pillar rating.

The predominant contributor to the rating is the firm's retention rate of the firm's portfolio managers, which is 83% over the available data period, up to five years. Noteworthy risk-adjusted performance also strengthens the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. However, the process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy has tended to hold more growth stocks than others in the ELSS (Tax Savings) Morningstar Category. But in terms of size exposure, it is similar to the average. Looking at additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical standard deviation of returns. This orientation tends to pay off most prominently when markets are hot. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. In addition, this strategy has exhibited a tendency to hold fewer stocks with high dividend or buyback yields over peers in recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide steady income payments, they may cut payouts if their earnings fall. In recent months, the strategy also had less Yield factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in industrials and consumer cyclical relative to the category average by 5.9 and 3.7 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and consumer defensive, underweight the average by 4.1 and 3.0 percentage points of assets, respectively. The portfolio is positioned across 76 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 35.2% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category average's 39.6%. And finally, in terms of portfolio turnover, on a year-over-year basis, 139% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.