JM Tax Gain Fund - Growth INF192K01650

JM ELSS Tax Saver Fund earns an Above Average Process Pillar rating.

The predominant contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 82%. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Respectable risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. However, the process is limited by the size of its portfolio management team, with four portfolio managers.

This strategy leans toward smaller, more growth-oriented companies compared with its average peer in the ELSS (Tax Savings) Morningstar Category. Examining additional factor exposure, this strategy has constantly downplayed yield, with its portfolio holding fewer companies with high dividend or buyback yields compared with Morningstar Category peers in recent years. Returning capital to shareholders often is not the highest priority of such businesses. The shares of such companies can deliver strong returns if they fulfill their growth projections, but they also carry more risk. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. This strategy has also exhibited a tilt towards more high-liquid assets over peers in recent years, evidenced by consistently holding companies with relatively higher trading volumes. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. In addition, this strategy has taken on exposure to high-momentum stocks in these 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 this month, the strategy also had more exposure to the Momentum 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 basic materials and consumer cyclical relative to the category average by 5.9 and 4.9 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and energy, underweight the average by 5.9 and 5.0 percentage points of assets, respectively. The strategy owns 51 securities and its assets are more dispersed than peers in the category. In particular, 37.3% of the strategy's assets are concentrated in the top 10 fund holdings, compared to the category average's 39.6%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 127% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.