Union Focused Fund Direct Growth INF582M01FS4

Union Focused Fund earns an Average Process Pillar rating.

The main driver of the rating is the firm's retention rate of the firm's portfolio managers, which is 83% over the available data period, up to five years. The size of the portfolio management team also bolsters the process. With two portfolio managers, the fund is reasonably well-resourced. However, the process is limited by the fund's unimpressive 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.

This strategy sticks with larger market-cap firms compared with the average fund in its peer group, the Focused Fund Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Analyzing additional factors, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum is based on the premise that stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. The managers have also tended to underweight yield compared with 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. In the most recent month, however, the fund's Yield exposure was in line with the Morningstar Category average. Furthermore, the strategy had similar exposure to high-volatility stocks compared with Morningstar Category peers in recent months. 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 technology and industrials relative to the category average by 5.8 and 3.9 percentage points, respectively. The sectors with low exposure compared with category peers are basic materials and financial services, underweight the average by 6.3 and 6.1 percentage points of assets, respectively. The portfolio is positioned across 30 holdings and is quite concentrated. Specifically, 53.5% of the strategy's assets are housed 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, 155% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.