Mahindra Manulife Flexi Cap Fund Direct Reinvestment Inc Dist cum Cap Wdrl INF174V01AT0

Mahindra Manulife Flexi Cap Fund earns an Above Average Process Pillar rating.

The largest contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 55%. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Management team experience, which averages 16 years at this fund, also strengthens the process. However, the process is limited by the parent firm's five-year retention rate of 59%, which raises concerns about long-term strategic consistency..

This strategy, over time, has opted for smaller market-cap companies, compared with others in the Flexi Cap 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. Examining additional factor exposure, this strategy has continually had more high-yield exposure than the Morningstar Category average during recent years, with the portfolio holding more stocks with high dividend or buyback yields. 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. Different from its historical appetite, however, the Yield factor was in line with the Morningstar Category average in recent months. This strategy has also taken a contrarian approach with lower exposure to momentum stocks over peers in recent 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. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. In addition, this strategy has not maintained a defensive tilt, demonstrated by low exposure to the quality factor. This means the fund avoids holding firms that are consistently profitable, growing, and have solid balance sheets. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. In recent months, the strategy also had less Quality 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 is overweight in financial services by 4.1 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared with category peers are healthcare and consumer cyclical, with healthcare underweighting the average portfolio by 3.3 percentage points of assets and consumer cyclical similar to the average. The strategy owns 58 securities and is relatively concentrated. In particular, 46.5% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 39.9% average.