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

Quant Focused fund earns an Above Average Process Pillar rating.

The most substantial contributor to the rating is its parent firm's excellent long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 4.8 stars. The parent firm's five-year risk-adjusted success ratio of 100% also bolsters the process. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Their noteworthy 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 parent firm's five-year retention rate of 69%, which raises concerns about long-term strategic consistency..

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 size exposure, it does not have much of a bias and resembles the typical portfolio. Examining additional factor exposure, 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. This strategy has also demonstrated more exposure to high-momentum stocks over peers in recent years. Momentum is based on the premise that stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. Compared with category peers, however, the strategy had less Momentum factor exposure in the latest month. Additionally, this strategy has tilted toward illiquid stocks during these years, evidenced by holding companies with relatively lower trading volumes than peers. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. Nevertheless, the fund's Liquidity 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 energy and consumer defensive relative to the category average by 15.9 and 9.9 percentage points, respectively. The sectors with low exposure compared with category peers are consumer cyclical and financial services, underweight the average by 13.2 and 8.5 percentage points of assets, respectively. The portfolio is composed of 25 holdings and is relatively concentrated. Specifically, 68.9% of the strategy's assets are housed within the top 10 holdings, compared with the typical peer's 33.9%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 125% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.