Sundaram Financial Services Opportunities Fund Direct Plan Reinvestment Inc Dist cum Cap Wdrl Option INF903J01NA0

Sundaram Fin Services Opp earns an Average Process Pillar rating.

The predominant contributor to the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. The size of the portfolio management team also contributes to the process. With two portfolio managers, the fund is reasonably well-resourced. However, the process is limited by its parent firm's subpar risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.5 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy targets smaller plays than its peers’ average in the Sector - Financial Services Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Looking at additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. Different from its historical appetite, however, the strategy was less exposed to the Momentum factor compared with Morningstar Category peers in the most recent month. This strategy has also displayed a tendency to hold more companies with high dividend or buyback yields than peers over recent years. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This orientation tends to pay off most prominently when markets are hot. In this month, the strategy also had more exposure to the Volatility factor over 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 has allocations in its top two sectors, financial services and consumer cyclical, that are similar to the category. The sectors with low exposure compared with category peers are technology and healthcare; however, the allocations are similar to the category. The portfolio is composed of 26 holdings and is less top-heavy than peers. Specifically, 69.5% of the fund’s assets are concentrated within the top 10 fund holdings, compared to the typical peer's 73.6%. And finally, in terms of portfolio turnover, on a year-over-year basis, 71% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.