Navi Flexi Cap Fund Direct Quarterly Reinvestment of Income Distribution cum capital Wdrl Opt INF959L01DZ6

Navi Flexi Cap Fund earns a Below Average Process Pillar rating.

The process benefits from low costs across its parent firm's funds, whose fees rank in their respective category's second-cheapest quintile on average. The pattern of low fees at the firm indicates that it is focused on delivering strong results for investors. However, the rating is weakened by the fund's weak long-term risk-adjusted performance. This can be seen in its 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 17% also holds the process back. 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 tends to pick smaller market-cap firms compared with the average fund in its peer group, the Flexi Cap Morningstar Category. But in terms of style (value/growth) exposure, it does not have much of a bias and resembles the category's typical portfolio. Examining additional factor exposure, this strategy has consistently had a defensive tilt owing to its exposure to high-quality stocks over the past few years. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. In recent months, the strategy was more exposed to the Quality factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical 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. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. 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. Nevertheless, the fund's Yield exposure was in line with peers in the latest month. 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 consumer cyclical relative to the category average by 8.6 and 6.0 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and basic materials, underweight the average by 9.2 and 3.4 percentage points of assets, respectively. The portfolio is composed of 67 holdings and is diversified among those holdings. In its most recent portfolio, 28.5% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 39.9%.