Kotak ESG Exclusionary Strategy Fund Regular Growth INF174KA1FF0

Kotak ESG Exclusionary Strategy Fund earns a High Process Pillar rating.

The leading factor in the rating is its parent firm's excellent long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.5 stars. The parent firm's five-year risk-adjusted success ratio of 63% also contributes to the process. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Their commendable success ratio suggests that the firm does well for investors and that this fund may benefit from that. The firm's five-year retention rate of 83% reinforces the process as well.

This strategy prefers more value-oriented stocks compared with the average fund in its peer group, the Equity - ESG Morningstar Category. But in terms of size exposure, it is similar to the average. Analyzing additional factors, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum is based on the premise that stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these years. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Additionally, this strategy has exhibited a tilt toward low-volatility stocks in these years, meaning companies with a lower historical standard deviation of returns over its peers. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. 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 basic materials and communication services relative to the category average by 7.2 and 3.1 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and industrials, underweight the average by 7.0 and 2.9 percentage points of assets, respectively. The portfolio is positioned across 46 holdings and is quite concentrated. In particular, 51.1% of the strategy's assets are housed within the top 10 holdings, as opposed to the typical peer's 39.6%.