Canara Robeco Small Cap Fund Regular Growth INF760K01JF9

Canara Robeco Small Cap Fund earns an Average Process Pillar rating.

The primary contributor to the rating is the fund's impressive 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 the parent firm's five-year risk-adjusted success ratio of 27%. 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 relatively low success ratio suggests that the firm could do better across its fund lineup.

This strategy has more exposure to the Growth factor than the Small-Cap Morningstar Category average. But in terms of size exposure, it is similar to the average. Analyzing additional factors, this strategy has consistently favored high-quality stocks, including those with low financial leverage and solid returns on equity, compared with Morningstar Category peers during recent years. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it endure downturns better than Morningstar Category peers. In recent months, the strategy was more exposed to the Quality factor compared with its Morningstar Category peers as well. This strategy has also taken a contrarian approach with lower exposure to momentum stocks over peers in recent years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. In the most recent month, however, the fund's Momentum exposure was in line with the Morningstar Category average. Furthermore, this strategy has leaned toward low-yield stocks over recent years, holding fewer companies with high dividend or buyback yields. Its preference for stocks with lower yields may well lead to a growthier portfolio. However, growth stocks court additional risks if their forecasts do not come to fruition and are often more volatile than companies with stable dividends. 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 financial services and industrials relative to the category average by 4.9 and 3.8 percentage points, respectively. The sectors with low exposure compared with category peers are technology and basic materials, underweight the average by 4.5 and 2.6 percentage points of assets, respectively. The strategy owns 100 securities and is relatively concentrated. Specifically, 21.4% of the strategy's assets are housed within the top 10 holdings, as opposed to the typical peer's 17.1%.