LIC MF Banking & Financial Services Fund Regular Growth INF767K01NH2

LIC MF Bnk& Fin Serv earns a Below Average Process Pillar rating.

The process is strengthened by low costs across its parent firm's funds, whose fees rank in their respective category's second-cheapest quintile on average. The pattern of low expenses at the firm indicates that it is focused on delivering strong results for investors. However, the rating is limited by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.5 stars. 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% also weakens the process. 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 Sector - Financial Services Morningstar Category. But in terms of style (value/growth) exposure, it does not have much of a bias and resembles the category's typical portfolio. Analyzing additional factors, this strategy has continually had more high-yield exposure than the Morningstar Category average during recent years, with the portfolio holding more stocks with high dividend or buyback yields. Higher-yield stocks can provide dependable income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. Different from its historical appetite, however, the Yield factor was in line with the Morningstar Category average in recent months. The strategy also had more exposure to highly liquid stocks compared with Morningstar Category peers in recent months. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. Additionally, the strategy had less exposure to high-momentum stocks compared with Morningstar Category peers in recent months. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. 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 has allocations in its top two sectors, consumer cyclical and technology, that are similar to the category. The sectors with low exposure compared with category peers are financial services and healthcare; however, the allocations are similar to the category. The strategy owns 30 securities and is diversified among those holdings. In its most recent portfolio, 68.8% of the fund’s assets were concentrated in the top 10 fund holdings, compared to the category average's 73.6%. And finally, in terms of portfolio turnover, on a year-over-year basis, 60% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.