Mirae Asset Midcap Fund Regular Growth INF769K01EY2

Mirae Asset Midcap Fund earns a Below Average Process Pillar rating.

The process is strengthened by the stability of the management team. Specifically, the fund has not seen a manager change in the last six years. However, the rating is held back by the parent firm's five-year retention rate of 67%, which raises concerns about long-term strategic consistency.. The parent firm's five-year risk-adjusted success ratio of 50% also detracts from the process. 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, over time, has consistently held more undervalued companies, compared with peers in the Mid-Cap Morningstar Category. But in terms of size exposure, it is similar to the average. Analyzing additional factors, this strategy has continually displayed high-yield exposure compared with Morningstar Category peers during recent years, holding more companies returning cash to shareholders via dividends or buybacks. 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. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Moreover, this strategy has been underweighting momentum stocks during these 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 recent months, the strategy also had less Momentum factor exposure than 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 has allocations in its top two sectors, financial services and utilities, that are similar to the category. The sectors with low exposure compared with category peers are technology and consumer cyclical, with technology underweighting the average portfolio by 3.7 percentage points of assets and consumer cyclical similar to the average. The strategy owns 79 securities and is similarly diversified as peers, with 24.6% of portfolio assets concentrated within the top 10 holdings. And finally, in terms of portfolio turnover, on a year-over-year basis, 33% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.