Shriram Flexi Cap Fund Direct Reinvestment of Income Distribution cum capital withdrawal option INF680P01125

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

The process benefits from 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 subpar 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. Unimpressive risk-adjusted performance also limits 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 continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few 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 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. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. In addition, this strategy has exhibited a tendency to hold fewer stocks with high dividend or buyback yields over peers in recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide consistent income payments, they may cut payouts if their earnings fall. 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 positioned across 58 holdings and is diversified among those holdings. In its most recent portfolio, 30.7% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category’s 39.5% average.