Quantum ELSS Tax Saver Fund - Regular Plan Payout Inc Dist cum Cap Wdrl INF082J01374

Quantum ELSS Tax Saver Fund earns a Below Average Process Pillar rating.

The process benefits from the fund's impressive 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. However, the rating is limited by the parent firm's five-year risk-adjusted success ratio of 29%. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's subpar risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.5 stars, also holds the process back. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy targets deeper value plays than its peers’ average in the ELSS (Tax Savings) 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 more high-yield exposure than the Morningstar Category average during recent years, with the portfolio holding more stocks with high dividend or buyback yields. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also been exposed to liquid stocks during these 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. In the most recent month, however, the fund's Liquidity exposure was in line with the Morningstar Category average. Moreover, this strategy has been underweighting momentum stocks during these years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. Nevertheless, the fund's Momentum 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 financial services and technology relative to the category average by 15.4 and 9.3 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and consumer defensive, underweight the average by 9.8 and 5.6 percentage points of assets, respectively. The portfolio is positioned across 31 holdings and is quite concentrated. Specifically, 47.0% of the strategy's assets are housed within the top 10 holdings, versus the typical peer's 39.5%.