Aditya Birla Sun Life ELSS Tax Saver Growth INF209K01108

Aditya BSL ELSS Tax Saver earns a Below Average Process Pillar rating.

The process benefits from its team of two portfolio managers, which is enough to execute the process. However, the rating is weakened by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year retention rate of 69% also holds the process back.

This strategy, over time, has opted for smaller market-cap companies, compared with others in the ELSS (Tax Savings) 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 continually held some stocks with low trading volume over the last few years. 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 latest month, the strategy was also less exposed to the Liquidity factor compared with Morningstar Category peers. This strategy also has had lower yield exposure than peers over these years; its portfolio has held fewer stocks with high dividend or buyback yields. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide steady income payments, they may cut payouts if their earnings decline. In the most recent month, however, the fund's Yield exposure was in line with the Morningstar Category average. In addition, this strategy has an underweight bias to the volatility factor, meaning investing in stocks that have a lower standard deviation of returns. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. Nevertheless, the fund's Volatility 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 energy by 3.0 percentage points in terms of assets compared with the category average, and its healthcare allocation is similar to the category. The sectors with low exposure compared with category peers are financial services and utilities, underweight the average by 5.0 and 2.9 percentage points of assets, respectively. The portfolio is composed of 65 holdings and is relatively top-heavy. Of the strategy's assets, 42.6% are concentrated within the top 10 holdings, as opposed to the typical peer's 39.8%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 32% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.