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

Sundaram Fin Services Opp earns an Average Process Pillar rating.

The primary contributor to the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The size of the portfolio management team also bolsters the rating. With two portfolio managers, the fund is reasonably well-resourced. However, the process is limited by its parent firm's disappointing 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.

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. Examining 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. 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 had more exposure to high-momentum stocks in recent years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. Compared with category peers, however, the strategy had less Momentum factor exposure in the latest 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. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. 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 positioned across 26 holdings and is diversified among those holdings. In its most recent portfolio, 71.1% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 73.6%.