JM Flexicap Fund (Direct) Growth Option INF192K01CC7

JM Flexicap Fund earns an Above Average Process Pillar rating.

The leading factor in 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 58% 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 commendable 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 67%, which raises concerns about long-term strategic consistency..

This strategy does not differentiate itself from its Flexi Cap category peers in terms of size and style exposure. 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. This strategy has also exhibited a tilt towards more high-liquid assets over peers in recent years, evidenced by consistently holding companies with relatively higher trading volumes. 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. In the most recent month, however, the fund's Liquidity exposure was in line with the Morningstar Category average. Furthermore, the strategy had more exposure to high-volatility stocks compared with Morningstar Category peers in recent months. This is a higher-risk, higher-reward approach. 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, industrials and consumer defensive, that are similar to the category. The sectors with low exposure compared with category peers are financial services and real estate, with financial services underweighting the average portfolio by 3.6 percentage points of assets and real estate similar to the average. The portfolio is positioned across 52 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 37.0% of the strategy's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 39.9%.