LIC MF ELSS Tax Saver Growth INF767K01956

LIC MF ELSS earns a Low Process Pillar rating.

The main driver of the rating is 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. Unimpressive risk-adjusted performance also limits the process. This can be seen in the fund's 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 23% further holds the process back. 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 modest success ratio suggests that the firm could do better across its fund lineup.

This strategy owns more growth stocks than its peers in the ELSS (Tax Savings) 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 constantly downplayed yield, with its portfolio holding fewer companies with high dividend or buyback yields compared with Morningstar Category peers in recent years. Returning capital to shareholders often is not the highest priority of such businesses. The shares of such companies can deliver strong returns if they fulfill their growth projections, but they also carry more risk. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. This strategy also has tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity, during these years. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. Additionally, this strategy has demonstrated a preference for high-momentum stocks in these years. Momentum is based on the premise that market outperformers will continue to outperform, and laggards will continue to lag. This means that managers are overweighting stocks currently on a winning streak. In recent months, however, the strategy had less Momentum factor exposure 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 consumer cyclical and industrials relative to the category average by 8.3 and 7.3 percentage points, respectively. The sectors with low exposure compared with category peers are utilities and healthcare, underweight the average by 4.2 and 4.1 percentage points of assets, respectively. The strategy owns 57 securities and is quite concentrated. Specifically, 42.0% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 39.6%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 42% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.