SBI Flexicap Fund Direct Growth INF200K01UG1

SBI Flexicap earns an Above Average Process Pillar rating.

The main driver of the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.7 stars. The parent firm's five-year risk-adjusted success ratio of 69% also bolsters the rating. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Their relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. However, the process is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

This strategy skews toward smaller, more value-oriented companies than its average peer in the Flexi Cap Morningstar Category. Looking at additional factor exposure, the managers have continually shown a willingness to take risks over the last few years, demonstrated by the portfolio's high volatility exposure. Such exposure tends to pay off when markets are hot and to be costly when they are not. In recent months, the strategy was more exposed to the Volatility factor compared with its Morningstar Category peers as well. This strategy has had lower exposure to momentum stocks over peers in recent years. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. In addition, the strategy had more exposure to high-liquidity stocks compared with Morningstar Category peers in recent months. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. 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 financial services by 5.5 percentage points in terms of assets compared with the category average, and its energy allocation is similar to the category. The sectors with low exposure compared with category peers are industrials and healthcare, underweight the average by 4.8 and 2.8 percentage points of assets, respectively. The portfolio is composed of 72 holdings and is relatively concentrated. Specifically, 47.1% of the fund’s assets are housed within the top 10 holdings, compared with the category’s 40.4% average. And finally, in terms of portfolio turnover, looking at year-over-year movements, 56% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.