Edelweiss Flexi Cap Fund Direct Growth INF843K01KK1

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

The most important driver of the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.7 stars. The parent firm's five-year risk-adjusted success ratio of 66% also strengthens 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 impressive 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 market capitalization, it is on par with peers. Looking at 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 also has had lower yield exposure than peers over these years; its portfolio has held fewer stocks with high dividend or buyback yields. 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. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. Lacking this ballast, the fund's prospects could rest on its ability to beat peers during economic booms. 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 is overweight in technology by 2.9 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared with category peers are consumer cyclical and basic materials, underweight the average by 4.0 and 3.1 percentage points of assets, respectively. The portfolio is composed of 83 holdings and is less top-heavy than peers. Specifically, 37.3% of the strategy's assets are concentrated within the top 10 fund holdings, as opposed to the typical peer's 40.4%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 43% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.