Edelweiss Small Cap Fund Direct Payout of Income Distribution cum capital withdrawal option INF754K01JO4

Edelweiss Small Cap Fund earns a High Process Pillar rating.

The most significant contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.7 stars. The parent firm's five-year risk-adjusted success ratio of 79% also strengthens the process. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Their compelling success ratio suggests that the firm does well for investors and that this fund may benefit from that. Excellent risk-adjusted performance also reinforces the process, as shown by the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk.

This strategy owns more growth stocks than its peers in the Small-Cap Morningstar Category. But in terms of size exposure, it does not have much of a bias and resembles the typical portfolio. Looking at additional factor exposure, this strategy has consistently had less exposure to yield compared with its Morningstar Category peers during recent years. Its preference for stocks with lower yields may well lead to a growthier portfolio. However, growth stocks court additional risks if their forecasts do not come to fruition and are often more volatile than companies with stable dividends. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. This strategy has also been exposed to liquid stocks during these years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. In addition, this strategy has favored high-quality stocks compared to peers over the years, which could be a good option for downside risk protection. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category peers. In this month, the strategy also had more exposure to the Quality factor 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 technology and financial services relative to the category average by 4.7 and 2.9 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and energy, with industrials underweighting the average portfolio by 3.6 percentage points of assets and energy similar to the average. The portfolio is composed of 80 holdings and is relatively concentrated. In particular, 23.3% of the fund’s assets are housed within the top 10 holdings, as opposed to the category’s 19.5% average. And finally, in terms of portfolio turnover, looking at year-over-year movements, 25% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.