HSBC Tax Saver Equity Fund Direct Growth INF336L01EE0

HSBC Tax Saver Equity earns a Below Average Process Pillar rating.

The process benefits from its team of two portfolio managers, which is sufficient to execute the process. However, the rating is limited by the parent firm's five-year risk-adjusted success ratio of 44%. 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. The parent firm's five-year retention rate of 74% also detracts from the process.

This strategy has more exposure to the Growth factor than the ELSS (Tax Savings) Morningstar Category average. But in terms of size exposure, it does not have much of a bias and resembles the typical portfolio. Looking at additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few 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, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. The managers have also tended to underweight yield compared with peers during recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide consistent income payments, they may cut payouts if their earnings fall. Similarly, in recent months, the strategy also had less exposure to the Yield factor than peers. In addition, this strategy holds highly liquid companies. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In this month, the strategy also had more exposure to the Liquidity factor 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 technology and healthcare relative to the category average by 5.5 and 3.6 percentage points, respectively. The sectors with low exposure compared with category peers are utilities and basic materials, underweight the average by 4.2 and 3.1 percentage points of assets, respectively. The portfolio is composed of 53 holdings and is relatively concentrated. In particular, 45.1% of the strategy's assets are housed within the top 10 holdings, compared with the typical peer's 39.6%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 19% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.