Union Focused Fund Direct Reinvestment of Income Distribution cum capital withdrawal INF582M01FT2

Union Focused Fund earns an Average Process Pillar rating.

The leading factor in the rating is the firm's retention rate of the firm's portfolio managers, which is 83% over the timeframe for which data is available, up to five years. The size of the portfolio management team also reinforces the process. 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 42%. 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 sticks with larger market-cap companies compared with the average fund in its peer group, the Focused Fund Morningstar Category. But in terms of investment style, it is on par with peers. Examining additional factor exposure, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. The managers have also tended to underweight yield compared with peers during recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide steady income payments, they may cut payouts if their earnings decline. Similarly, in recent months, the strategy also had less exposure to the Yield factor than peers. Additionally, the strategy had more exposure to high-quality stocks compared with Morningstar Category peers in recent months. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. 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 technology and healthcare relative to the category average by 5.7 and 2.6 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and basic materials, underweight the average by 6.4 and 5.5 percentage points of assets, respectively. The portfolio is positioned across 31 holdings and is relatively top-heavy. Of the strategy's assets, 52.1% are concentrated within the top 10 holdings, compared to the category’s 33.4% average.