LIC MF Flexi Cap Fund Direct Plan Payout of Income Distribution cum Cap Wrdl INF767K01EF5

LIC MF Flexi Cap Fund earns a Low Process Pillar rating.

The main detractor from the rating is the fund's unremarkable long-term risk-adjusted performance. This can be seen in its 10-year alpha calculated relative to the category average, which suggests that the process has struggled over that period. The parent firm's disappointing risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.5 stars, also holds the rating back. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year risk-adjusted success ratio of 23% further holds the rating back. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

This strategy targets smaller plays than its peers’ average in the Flexi Cap Morningstar Category. But in terms of investment style, it is on par with peers. Looking at additional factor exposure, this strategy has consistently had less exposure to yield compared with its Morningstar Category peers during recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide consistent income payments, they may cut payouts if their earnings decline. Different from its historical appetite, however, the Yield factor was in line with the Morningstar Category average in recent months. This strategy also has tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity, during these years. Such holdings could cause it to trail peers during economic booms, but help it better withstand busts. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This contributes to a higher-risk, higher-reward approach. In this month, the strategy also had more exposure to the Volatility factor over 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 defensive relative to the category average by 6.0 and 5.2 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and technology, underweight the average by 10.1 and 3.8 percentage points of assets, respectively. The strategy owns 67 securities and is less top-heavy than peers. Specifically, 31.7% of the strategy's assets are concentrated within the top 10 fund holdings, compared to the typical peer's 40.4%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 147% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.