HSBC ELSS Tax saver Fund Growth INF677K01064

HSBC ELSS Tax saver 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 limited by the parent firm's five-year risk-adjusted success ratio of 44%. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 74% also weakens the process.

This strategy leans toward smaller, more growth-oriented companies than its average peer in the ELSS (Tax Savings) Morningstar Category. Examining 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 had a defensive tilt, with exposure to higher-quality stocks compared with peers in recent years. Such holdings could cause it to trail peers during economic booms, but help it better withstand busts. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. In this month, the strategy also had more exposure to the Volatility 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 industrials and consumer cyclical relative to the category average by 6.6 and 6.4 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and healthcare, underweight the average by 7.3 and 2.7 percentage points of assets, respectively. The strategy owns 87 securities and is less top-heavy than peers. Specifically, 28.9% of the strategy's assets are concentrated within the top 10 fund holdings, as opposed to the category’s 39.6% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 66% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.