360 ONE Focused Equity Fund Direct Payout of Income Distribution cum Cap Wdrl INF579M01910

360 ONE Focused Equity earns an Above Average Process Pillar rating.

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 100%. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Excellent risk-adjusted performance also contributes to the process. This can be seen in the fund's 10-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. However, the process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy, over time, has opted for smaller market-cap companies, compared with others in the Focused Fund Morningstar Category. But in terms of investment style, it is on par with peers. Analyzing additional factors, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last 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. Different from its historical appetite, however, the Liquidity factor was in line with the Morningstar Category average in recent months. This strategy has had more exposure to high-momentum stocks over its peers in recent 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. Compared with category peers, however, the strategy had less Momentum factor exposure in the latest month. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. Nevertheless, the fund's Yield exposure was in line with peers in the latest month. 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 communication services and industrials relative to the category average by 4.1 and 3.3 percentage points, respectively. The sectors with low exposure compared with category peers are energy and consumer defensive; however, the allocations are similar to the category. The portfolio is composed of 32 holdings and is relatively concentrated. In particular, 55.9% of the strategy's assets are housed within the top 10 holdings, compared with the typical peer's 33.9%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 28% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.