Quantum Long Term Equity Value Fund Regular Plan Payout Inc Dist cum Cap Wdrl INF082J01259

Quantum Long Term Equity value Fund earns a Low Process Pillar rating.

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 32%. 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 modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's inferior risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.7 stars, also detracts from the process. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year retention rate of 64% limits the rating further.

This strategy leans toward larger, more undervalued companies compared with its average peer in the Value Morningstar Category. Analyzing additional factors, the managers have consistently had exposure to low-volatility stocks over the past few years, or those whose relative returns look best when the markets are their worst. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. Different from its historical appetite, however, the Volatility factor was in line with the Morningstar Category average in recent months. This strategy has had 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. Additionally, the managers have tended to overweight yield, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. Higher-yield stocks can provide dependable income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. In recent months, however, the strategy had less Yield factor exposure 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 financial services and technology relative to the category average by 15.4 and 9.6 percentage points, respectively. The sectors with low exposure compared with category peers are energy and industrials, underweight the average by 8.2 and 7.2 percentage points of assets, respectively. The portfolio is composed of 33 holdings and is quite concentrated. More concretely, 45.9% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 39.8% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 14% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.