Samco Flexi Cap Fund Regular Growth INF0K1H01016

Samco 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 being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons. Management team experience, which averages three years at this fund, also limits the process.

This strategy tends to hold smaller, higher-growth companies than its average peer in the Flexi Cap Morningstar Category. Examining additional factor exposure, this strategy has consistently favored high-quality stocks, including those with low financial leverage and solid returns on equity, compared with Morningstar Category peers during recent years. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. In recent months, the strategy was more exposed to the Quality factor compared with its Morningstar Category peers as well. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. This orientation tends to pay off most prominently when markets are hot. Compared with category peers, the strategy also had more exposure to the Volatility 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 steady income payments, they may cut payouts if their earnings fall. In this month, however, the strategy had more exposure to the Yield factor 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 technology and consumer defensive relative to the category average by 22.7 and 3.5 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and consumer cyclical, underweight the average by 9.4 and 8.7 percentage points of assets, respectively. The strategy owns 28 securities and is quite concentrated. More concretely, 47.5% of the fund’s assets are housed within the top 10 holdings, compared to the category’s 40.4% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 113% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.