Shriram Flexi Cap Fund Direct Payout of Income Distribution cum capital withdrawal option INF680P01117

Shriram Flexi Cap Fund earns a Below Average Process Pillar rating.

The process is strengthened by the size of its portfolio management team. With three portfolio managers at the helm, the fund is reasonably well-resourced. However, the rating is weakened by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 1.8 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. Subpar risk-adjusted performance also weakens the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

This strategy is similar to its Flexi Cap category peers in terms of market-cap and style exposure. Looking at additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy also has tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity, during these years. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category peers. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. Additionally, this strategy has had lower yield exposure than peers, with the portfolio holding fewer stocks with high dividend or buyback yields over these 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 recent months, the strategy also had less Yield 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 healthcare and technology relative to the category average by 18.6 and 4.5 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and basic materials, underweight the average by 14.1 and 4.8 percentage points of assets, respectively. The portfolio is composed of 58 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 30.7% of the fund’s assets were concentrated in the top 10 fund holdings, compared to the category’s 39.5% average.