360 ONE Focused Equity Fund Regular Payout of Income Distribution cum Cap Wdrl INF579M01886

360 ONE Focused Equity earns an Above Average Process Pillar rating.

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 100%. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Excellent risk-adjusted performance also contributes to the process. This can be seen in the fund's 10-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. However, the process is limited by being an actively managed strategy. Historical data, such as Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy tends to pick smaller market-cap companies compared with the average fund in its peer group, the Focused Fund Morningstar Category. But in terms of investment style, it is on par with peers. Analyzing additional factors, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. Different from its historical appetite, however, the Liquidity factor was in line with the Morningstar Category average in recent months. This strategy has had more exposure to high-momentum stocks over its peers in recent years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. Compared with category peers, however, the strategy had less Momentum factor exposure in the latest month. Additionally, the managers have tended to overweight yield, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. Higher-yield stocks can provide dependable income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. Nevertheless, the fund's Yield exposure was in line with peers in the latest month. 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 communication services and industrials relative to the category average by 4.1 and 3.3 percentage points, respectively. The sectors with low exposure compared with category peers are energy and consumer defensive; however, the allocations are similar to the category. The portfolio is composed of 32 holdings and is relatively top-heavy. Of the strategy's assets, 55.9% are concentrated within the top 10 holdings, compared to the typical peer's 33.9%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 28% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.