Tata Banking & Financial Services Fund Direct Growth INF277K01Z10

Tata Banking& Financial Services earns an Average Process Pillar rating.

The leading factor in the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The parent firm's five-year risk-adjusted success ratio of 50% also bolsters the rating. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Their relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. However, the process is limited by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.9 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy, over time, has preferred smaller market-cap companies, compared with others in the Sector - Financial Services Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Looking at additional factor exposure, this strategy has consistently had a defensive tilt owing to its exposure to high-quality stocks over the past few years. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. Different from its historical appetite, however, the Quality factor was in line with the Morningstar Category average in recent months. The strategy also had more exposure to high-volatility stocks compared with Morningstar Category peers in the most recent month. This orientation tends to pay off most prominently when markets are hot. In addition, the strategy had less exposure to high-yield stocks compared with Morningstar Category peers in recent months. 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. 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, technology and consumer cyclical, that are similar to the category. The sectors with low exposure compared with category peers are financial services and healthcare; however, the allocations are similar to the category. The strategy owns 35 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 66.2% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category average's 73.1%.