Quantum ESG Best In Class Strategy Fund Direct Growth INF082J01382

Quantum ESG Best In Class Strategy Fund earns a Below Average Process Pillar rating.

The process is bolstered by its team of two portfolio managers, which is enough to execute the process. However, the rating is weakened by the parent firm's five-year risk-adjusted success ratio of 29%. 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 modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's disappointing risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.6 stars, also holds the process back. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy prefers smaller market-cap firms compared with the average fund in its peer group, the Equity - ESG 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. Looking at 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 displayed a tendency to hold more companies with high dividend or buyback yields than peers over recent years. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. In the most recent month, however, the fund's Yield exposure was in line with the Morningstar Category average. In addition, this strategy has exhibited a tilt toward liquid assets, evidenced by consistently holding companies with relatively higher trading volumes. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In this month, the strategy also had more exposure to the Liquidity 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 consumer cyclical and consumer defensive relative to the category average by 13.7 and 3.6 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and utilities, underweight the average by 10.6 and 2.6 percentage points of assets, respectively. The strategy owns 62 securities and is less top-heavy than peers. Specifically, 30.7% of the strategy's assets are concentrated within the top 10 fund holdings, compared to the category’s 39.0% average.