Quantum ELSS Tax Saver Fund - Regular Plan Growth Option INF082J01366

Quantum ELSS Tax Saver Fund earns a Low Process Pillar rating.

The largest detractor from the rating is the parent firm's five-year risk-adjusted success ratio of 41%. 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 subpar 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 2.7 stars, also limits the process. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year retention rate of 64% weakens the process further.

This strategy targets deeper value plays than its peers’ average in the ELSS (Tax Savings) Morningstar Category. But in terms of market capitalization, it is on par with peers. 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. 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. Given the high trading volume of holdings, this strategy has been exposed to liquid assets during these years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to experience a significant loss. In the most recent month, however, the fund's Liquidity exposure was in line with the Morningstar Category average. Additionally, this strategy has demonstrated a bias away from momentum stocks during these years. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. In recent months, the strategy also had less Momentum factor exposure 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 financial services and technology relative to the category average by 15.8 and 9.5 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and consumer defensive, underweight the average by 10.0 and 5.4 percentage points of assets, respectively. The portfolio is composed of 32 holdings and is relatively concentrated. In particular, 45.3% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 39.6%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 17% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.