JM Flexicap Fund Growth INF192K01635

JM Flexicap Fund earns an Above Average Process Pillar rating.

The largest contributor to the rating is the fund's impressive long-term risk-adjusted performance. This can be seen in its ten-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. The parent firm's five-year risk-adjusted success ratio of 81% also influences the rating. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Their relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. However, the process is limited by the size of its portfolio management team, with four portfolio managers.

This strategy does not differentiate itself from its Flexi Cap category peers in terms of size and style exposure. Examining additional factor exposure, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few years. Momentum is based on the premise that market outperformers will continue to outperform, and laggards will continue to lag. This means that managers are overweighting stocks currently on a winning streak. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these 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. In the most recent month, however, the fund's Yield exposure was in line with the Morningstar Category average. Given the high trading volume of holdings, this fund also holds highly liquid assets. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to experience a significant loss. Nevertheless, the fund's Liquidity 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 healthcare by 4.6 percentage points in terms of assets compared with the category average, and its consumer cyclical allocation is similar to the category. The sectors with low exposure compared with category peers are energy and communication services, with energy underweighting the average portfolio by 3.1 percentage points of assets and communication services similar to the average. The portfolio is composed of 64 holdings and invests 37.7% of assets in its top 10 holdings, similar to the category average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 146% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.