LIC MF Midcap Fund Regular Reinvestment of Income Distribution cum Cap Wdrl INF397L01JM4

LIC MF Midcap Fund earns a Low Process Pillar rating.

The main driver of the rating is its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.4 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. Subpar risk-adjusted performance also weakens the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year risk-adjusted success ratio of 30% further holds the process back. The measure indicates the percentage of a firm's funds that have beat 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.

This strategy has tended to hold more growth stocks than others in the Mid-Cap 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 constantly downplayed yield, with its portfolio holding fewer companies with high dividend or buyback yields compared with Morningstar Category peers in recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide steady income payments, they may cut payouts if their earnings decline. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. This strategy has also exhibited an overweight liquidity risk tilt, evidenced by holding companies with relatively lower trading volumes than peers in these years. 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. Similarly, in recent months, the strategy also had less exposure to the Liquidity factor than peers. Additionally, the strategy had more exposure to high-quality stocks compared with Morningstar Category peers in recent months. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category 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 consumer cyclical and industrials relative to the category average by 8.9 and 4.4 percentage points, respectively. The sectors with low exposure compared with category peers are healthcare and financial services, underweight the average by 5.4 and 5.1 percentage points of assets, respectively. The portfolio is positioned across 65 holdings and is quite concentrated. Specifically, 27.1% of the portfolio's assets are housed within the top 10 holdings, compared to the category’s 24.0% average.