HSBC Large and Mid Cap Fund - IDCW Direct INF336L01NW3

HSBC Large& Mid Cap Fund earns a Below Average Process Pillar rating.

The process benefits from the size of its portfolio management team. With three portfolio managers at the helm, the fund is reasonably well-resourced. However, the rating is held back by the parent firm's five-year risk-adjusted success ratio of 44%. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 74% also holds the process back.

This strategy has more exposure to the Growth factor than the Large & Mid-Cap Morningstar Category average. But in terms of market capitalization, it is on par with peers. Analyzing additional factors, this strategy has exhibited a tendency to hold fewer stocks with high dividend or buyback yields compared with Morningstar Category peers in recent years. 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. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. This strategy has also had more exposure to high-momentum stocks in recent years. Momentum is based on the premise that market outperformers will continue to outperform, and laggards will continue to lag. This means that managers are overweighting stocks currently on a winning streak. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This contributes to a higher-risk, higher-reward approach. 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 is overweight in industrials and technology relative to the category average by 13.5 and 7.9 percentage points, respectively. The sectors with low exposure compared with category peers are basic materials and financial services, underweight the average by 7.6 and 4.0 percentage points of assets, respectively. The portfolio is composed of 83 holdings and is quite concentrated. In particular, 36.3% of the strategy's assets are housed within the top 10 holdings, versus the category average of 32.2%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 105% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.