LIC MF Banking & Financial Services Fund Regular Payout of Income Distribution cum Cap Wdrl INF767K01NG4

LIC MF Bnk& Fin Serv earns a Below Average Process Pillar rating.

The process is strengthened by the stability of the management team. Specifically, the fund has not seen a manager change in the last four years. However, the rating is weakened by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.4 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. Unremarkable risk-adjusted performance also holds the process back. This can be seen in the fund's 10-year alpha calculated relative to the category average, which suggests that the process has struggled over that period.

This strategy targets smaller plays than its peers’ average in the Sector - Financial Services Morningstar Category. But in terms of style (value/growth) exposure, it does not have much of a bias and resembles the category's typical portfolio. Analyzing additional factors, the managers have consistently overweighted yield-paying companies compared with Morningstar Category peers in recent years, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. Different from its historical appetite, however, the Yield factor was in line with the Morningstar Category average in recent months. This strategy has had lower exposure to momentum stocks over peers in recent years. Momentum investors tend to expect stocks that have done well recently to continue to do so in the short term. Momentum approaches can entail higher turnover and trading costs since the top stocks can often change. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. Furthermore, the strategy had more exposure to high-volatility stocks compared with Morningstar Category peers in recent months. Such exposure tends to pay off when markets are hot and to be costly when they are not. 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, consumer cyclical and technology, that are similar to the category. The sectors with low exposure compared with category peers are financial services and healthcare, with financial services underweighting the average portfolio by 2.6 percentage points of assets and healthcare similar to the average. The strategy owns 34 securities and is diversified among those holdings. In its most recent portfolio, 68.4% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category’s 73.6% average.