JM Flexicap Fund (Direct) Growth Option INF192K01CC7

JM Flexicap Fund earns an Above Average Process Pillar rating.

The main contributor to 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 parent firm's five-year risk-adjusted success ratio of 62% also influences the rating. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Their compelling 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 size of its portfolio management team, with four portfolio managers.

This strategy hews closely to the market cap and investment style of its Flexi Cap category peers. Examining additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. Different from its historical appetite, however, the Momentum factor was in line with the Morningstar Category average in recent months. This strategy has also been exposed to liquid stocks during these years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. In addition, the strategy had more exposure to high-yield stocks compared with Morningstar Category peers in recent months. Higher-yield stocks can provide dependable income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. 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, healthcare and financial services, that are similar to the category. The sectors with low exposure compared with category peers are technology and basic materials, underweight the average by 2.8 and 2.5 percentage points of assets, respectively. The strategy owns 48 securities and is similarly diversified as peers, with 36.5% of portfolio assets concentrated within the top 10 holdings.