Quant Infrastructure Fund Growth INF966L01523

Quant Infrastructure Fund earns an Above Average Process Pillar rating.

The most meaningful contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 4.8 stars. The parent firm's five-year risk-adjusted success ratio of 100% also contributes to the process. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Their relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. However, the process is limited by the parent firm's five-year retention rate of 69%, which raises concerns about long-term strategic consistency..

This strategy tends to hold larger, more undervalued companies compared with its average peer in the Equity - Infrastructure Morningstar Category. Analyzing additional factors, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few 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. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. This orientation tends to pay off most prominently when markets are hot. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. In addition, this strategy has taken on exposure to high-momentum stocks in these years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. 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 defensive and utilities relative to the category average by 8.5 and 8.3 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and communication services, underweight the average by 14.5 and 5.6 percentage points of assets, respectively. The portfolio is positioned across 30 holdings and is relatively top-heavy. Of the strategy's assets, 71.1% are concentrated within the top 10 holdings, compared to the typical peer's 29.1%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 79% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.