LIC MF Focused Fund Direct Reinvestment of Income Distribution cum Cap Wdrl INF397L01JY9

LIC MF Focused 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. Mediocre risk-adjusted performance also detracts from 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 detracts from the process. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

This strategy hews closely to the market cap and investment style of its Focused Fund category peers. Analyzing additional factors, this strategy has consistently overweighted the volatility factor compared with Morningstar Category peers over the last few years, meaning it invests in stocks with a history of the higher standard deviation of returns. 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 recent months, the strategy was more exposed to the Volatility factor compared with its Morningstar Category peers as well. The strategy also 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. In addition, the strategy had similar exposure to high-liquidity stocks compared with Morningstar Category peers in recent months. 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 industrials and technology relative to the category average by 12.5 and 7.8 percentage points, respectively. The sectors with low exposure compared with category peers are consumer cyclical and communication services, underweight the average by 12.6 and 6.6 percentage points of assets, respectively. The portfolio is composed of 31 holdings and is relatively top-heavy. Of the strategy's assets, 48.6% are concentrated within the top 10 holdings, as opposed to the category’s 33.6% average.