HSBC ELSS Tax saver Fund Direct Plan Payout of Income Distribution cum Cap Wrdl INF917K01GO3

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 detracts from the process.

This strategy skews toward smaller, higher-growth companies than its average peer in the ELSS (Tax Savings) Morningstar Category. Examining additional factor exposure, 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 position favoring high-quality stocks in recent years, which could contribute to higher 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. 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. This contributes to a higher-risk, higher-reward approach. 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 average's 39.6%. And finally, 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.