Bandhan Small Cap Fund Regular Growth INF194KB1AJ8

Bandhan Small Cap Fund earns a Below Average Process Pillar rating.

The process is bolstered by the fund's excellent long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. However, the rating is limited by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.2 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year risk-adjusted success ratio of 26% also weakens 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 prefers more value-oriented stocks compared with the average fund in its peer group, the Small-Cap Morningstar Category. But in terms of size exposure, it is similar to the average. Examining additional factor exposure, this strategy tilts consistently toward stocks with lower quality or the shares of companies with more financial leverage and lower profitability, compared with Morningstar Category peers over the past few years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. Given the high trading volume of holdings, this strategy has been exposed to liquid assets during these years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This is 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 real estate and financial services relative to the category average by 5.9 and 5.7 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and consumer cyclical, underweight the average by 7.0 and 3.2 percentage points of assets, respectively. The portfolio is composed of 187 holdings and is quite concentrated. More concretely, 20.3% of the fund’s assets are housed within the top 10 holdings, compared to the category average of 13.7%. And finally, in terms of portfolio turnover, on a year-over-year basis, 89% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.