Quant Mid Cap Fund Reinvestment of Income Distribution cum capital withdrawal option INF966L01168

Quant Mid Cap Fund earns an Above Average Process Pillar rating.

The main driver of 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 4.6 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 outperformed their respective category's median return for the period. Their commendable 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 seven portfolio managers.

This strategy tends to hold larger, more value-oriented companies than its average peer in the Mid-Cap Morningstar Category. 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. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts 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 tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, this strategy has demonstrated a tilt toward low-volatility stocks in these years, meaning companies with a lower historical standard deviation of returns over its peers. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. In recent months, the strategy also had less Volatility 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 energy and consumer defensive relative to the category average by 14.5 and 10.1 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and consumer cyclical, underweight the average by 14.0 and 13.1 percentage points of assets, respectively. The portfolio is composed of 42 holdings and is relatively top-heavy. Of the strategy's assets, 63.3% are concentrated within the top 10 holdings, as opposed to the category’s 25.5% average.