HSBC ELSS Tax saver Fund Payout of Income Distribution cum Cap Wrdl INF677K01072

HSBC ELSS Tax saver 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 the parent firm's five-year risk-adjusted success ratio of 43%. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. The parent's subpar 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 skews toward smaller, more growth-oriented companies compared with its average peer in the ELSS (Tax Savings) Morningstar Category. Analyzing additional factors, 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 had a defensive tilt, with exposure to higher-quality stocks compared with peers in recent years. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. 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 tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. Such exposure tends to pay off when markets are hot and to be costly when they are not. 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 7.4 and 6.3 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and healthcare, underweight the average by 7.5 and 2.6 percentage points of assets, respectively. The portfolio is positioned across 85 holdings and is diversified among those holdings. In its most recent portfolio, 27.9% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category’s 39.8% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 66% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.