Quant Focused fund Growth Option Direct Plan INF966L01853

Quant Focused fund earns an Above Average Process Pillar rating.

The main driver of the rating is its parent firm's excellent long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 4.8 stars. The parent firm's five-year risk-adjusted success ratio of 100% also bolsters the rating. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Their compelling success ratio suggests that the firm does well for investors and that this fund may benefit from that. However, the process is limited by the parent firm's five-year retention rate of 69%, which raises concerns about long-term strategic consistency..

This strategy prefers more value-oriented stocks compared with the average fund in its peer group, the Focused Fund Morningstar Category. But in terms of size exposure, it does not have much of a bias and resembles the typical portfolio. Examining additional factor exposure, this strategy has continually displayed high-yield exposure compared with Morningstar Category peers during recent years, holding more companies returning cash to shareholders via dividends or buybacks. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has had more exposure to high-momentum stocks over its peers in recent years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. Compared with category peers, however, the strategy had less Momentum factor exposure in the latest month. Given the low trading volume of holdings, this strategy has also tilted toward illiquid assets during these years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. Nevertheless, the fund's Liquidity exposure was in line with peers in the latest month. 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 energy and consumer defensive relative to the category average by 15.9 and 9.9 percentage points, respectively. The sectors with low exposure compared with category peers are consumer cyclical and financial services, underweight the average by 13.2 and 8.5 percentage points of assets, respectively. The portfolio is composed of 25 holdings and is relatively top-heavy. Of the strategy's assets, 68.9% are concentrated within the top 10 holdings, as opposed to the typical peer's 33.9%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 125% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.