Baroda BNP Paribas Banking and Financial Services Fund Regular Pyt of Inc Dis cum Cap Wdrl INF955L01831

Baroda BNP Paribas Banking& Fin Serv earns a Below Average Process Pillar rating.

The process is bolstered by its team of two portfolio managers, which is enough to execute the process. However, the rating is held back by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.7 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year risk-adjusted success ratio of 41% also weakens the process. The measure indicates the percentage of a firm's funds that have beat 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 owns more growth stocks than its peers in the Sector - Financial Services Morningstar Category. But in terms of size exposure, it is similar to the average. Examining additional factor exposure, this strategy has consistently overweighted the volatility factor compared with Morningstar Category peers over the last few years, meaning it invests in stocks with a history of the higher standard deviation of returns. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. Different from its historical appetite, however, the Volatility factor was in line with the Morningstar Category average in recent months. The strategy also had more exposure to high-momentum stocks compared with Morningstar Category peers in the most recent month. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In addition, the strategy had less exposure to high-yield stocks compared with Morningstar Category peers in recent months. Its preference for stocks with lower yields may well lead to a growthier portfolio. However, growth stocks court additional risks if their forecasts do not come to fruition and are often more volatile than companies with stable dividends. 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 has allocations in its top two sectors, technology and consumer cyclical, that are similar to the category. The sectors with low exposure compared with category peers are financial services and healthcare; however, the allocations are similar to the category. The portfolio has 29 holdings and is similarly diversified as peers, with 75.2% of portfolio assets concentrated within the top 10 holdings.