Navi ELSS Tax Saver Fund Direct Growth INF959L01CD5

Navi ELSS Tax Saver Fund earns a Below Average Process Pillar rating.

The process benefits from low expenses across its parent firm's funds, whose fees rank in their respective category's middle quintile on average. The pattern of low fees at the firm suggests that it is focused on delivering strong results for investors. However, the rating is limited by the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year risk-adjusted success ratio of 8% also weakens the process. The measure indicates the percentage of a firm's funds that have outperformed 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 skews toward smaller, higher-growth companies compared with its average peer in the ELSS (Tax Savings) Morningstar Category. 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 steady income payments, they may cut payouts if their earnings decline. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. Given the high trading volume of holdings, this strategy has been exposed to liquid assets during these years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This is 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 technology relative to the category average by 8.7 and 5.2 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and consumer cyclical, underweight the average by 10.3 and 8.2 percentage points of assets, respectively. The portfolio is positioned across 46 holdings and its assets are more dispersed than peers in the category. In particular, 34.8% of the strategy's assets are concentrated in the top 10 fund holdings, compared to the category average's 39.6%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 24% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.