Quant Focused fund Reinvestment of Income Distribution cum capital withdrawal option INF966L01366

Quant Focused fund earns an Above Average Process Pillar rating.

The leading factor in 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 4.6 stars. The parent firm's five-year risk-adjusted success ratio of 91% also influences 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 the size of its portfolio management team, with eight portfolio managers.

This strategy prefers more value-oriented stocks compared with the average fund in its peer group, the Focused Fund Morningstar Category. But in terms of market capitalization, it is on par with peers. Looking at additional factor exposure, this strategy has continually displayed high-yield exposure compared with Morningstar Category peers during recent years, holding more companies returning cash to shareholders via dividends or buybacks. Higher-yield stocks can provide steady income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-volatility stocks in recent years, meaning those that have a lower standard deviation of returns. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. Similarly, in recent months, the strategy also had less exposure to the Volatility factor than peers. Additionally, the strategy had less exposure to high-momentum stocks compared with Morningstar Category peers in recent months. 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. 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 energy and real estate relative to the category average by 18.6 and 7.0 percentage points, respectively. The sectors with low exposure compared with category peers are consumer cyclical and financial services, underweight the average by 12.6 and 11.2 percentage points of assets, respectively. The portfolio is positioned across 27 holdings and is relatively concentrated. In particular, 70.3% of the strategy's assets are housed within the top 10 holdings, compared with the category’s 33.6% average.