Union Value Fund Regular Payout of Income Distribution cum capital withdrawal INF582M01EQ1

Union Value Fund earns an Average Process Pillar rating.

The leading factor in the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The firm's five-year retention rate of 83% also contributes to the process. 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 hews closely to the market cap and investment style of its Value category peers. Examining additional factor exposure, this strategy tilts consistently toward stocks with lower quality or the shares of companies with more financial leverage and lower profitability, compared with Morningstar Category peers over the past few years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. This strategy has also been exposed to liquid stocks during these years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. Additionally, the strategy had more exposure to high-momentum stocks compared with Morningstar Category peers in recent months. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. 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 by 6.9 percentage points in terms of assets compared with the category average, and its consumer cyclical allocation is similar to the category. The sectors with low exposure compared with category peers are consumer defensive and energy, with consumer defensive underweighting the average portfolio by 2.8 percentage points of assets and energy similar to the average. The portfolio is composed of 62 holdings and is less top-heavy than peers. Specifically, 37.6% of the portfolio's assets are concentrated within the top 10 fund holdings, compared to the category average's 40.4%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 139% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.