Sundaram Focused Fund Half Yearly Transfer of Income Dis cum Cap Wdrl plan INF173K01AL2

Sundaram Focused earns a Below Average Process Pillar rating.

The process benefits from the experience of the management team, which averages 13 years at this fund. However, the rating is weakened by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.5 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. Subpar risk-adjusted performance also detracts from the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

This strategy targets larger plays than its peers’ average in the Focused Fund Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Looking at additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum is based on the premise that stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. Different from its historical appetite, however, the strategy was less exposed to the Momentum factor compared with Morningstar Category peers in the most recent month. This strategy also has held illiquid stocks, evidenced by holdings' lower trading volume in recent years over peers, resulting in high liquidity risk exposure. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In the most recent month, however, the fund's Liquidity exposure was in line with the Morningstar Category average. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. Nevertheless, the fund's Yield exposure was in line with peers in the latest month. 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 communication services and industrials relative to the category average by 3.4 and 3.3 percentage points, respectively. The sectors with low exposure compared with category peers are consumer cyclical and basic materials, underweight the average by 6.8 and 4.4 percentage points of assets, respectively. The portfolio is composed of 25 holdings and is quite concentrated. In particular, 55.6% of the strategy's assets are housed within the top 10 holdings, as opposed to the typical peer's 33.6%.