Edelweiss Flexi Cap Fund Direct Growth INF843K01KK1

Edelweiss Flexi Cap Fund earns an Above Average Process Pillar rating.

The most significant contributor to the rating is its parent firm's excellent long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.5 stars. The parent firm's five-year risk-adjusted success ratio of 65% also contributes to the process. The measure indicates the percentage of a firm's funds that have outperformed 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 57%, which raises concerns about long-term strategic consistency..

This strategy owns more growth stocks than its peers in the Flexi Cap Morningstar Category. But in terms of size exposure, it does not have much of a bias and resembles the typical portfolio. Examining additional factor exposure, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last 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. This strategy has also leaned away from the stocks of companies with high dividend or buyback yields over these years. 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. In the most recent month, however, the fund's Yield exposure was in line with the Morningstar Category average. In addition, this strategy has not maintained a defensive tilt, demonstrated by low exposure to the quality factor. This means the fund avoids holding firms that are consistently profitable, growing, and have solid balance sheets. Such positions do not tend to provide much ballast for a portfolio. In this month, however, the strategy had more exposure to the Quality factor than 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 has allocations in its top two sectors, financial services and utilities, that are similar to the category. The sectors with low exposure compared with category peers are consumer cyclical and basic materials, with consumer cyclical underweighting the average portfolio by 3.9 percentage points of assets and basic materials similar to the average. The portfolio is composed of 81 holdings and invests 36.6% of assets in its top 10 holdings, similar to the category average.