LIC MF Midcap Fund Regular Reinvestment of Income Distribution cum Cap Wdrl INF397L01JM4

LIC MF Midcap Fund earns a Low Process Pillar rating.

The main driver of the rating is its parent firm's subpar risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.5 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. Subpar risk-adjusted performance also detracts from the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year risk-adjusted success ratio of 23% further weakens the process. 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.

This strategy has more exposure to the Growth factor than the Mid-Cap Morningstar Category average. But in terms of market capitalization, it is on par with peers. Looking at additional factor exposure, this strategy has constantly downplayed yield, with its portfolio holding fewer companies with high dividend or buyback yields compared with Morningstar Category peers in recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide steady income payments, they may cut payouts if their earnings fall. Different from its historical appetite, however, the Yield factor was in line with the Morningstar Category average in recent months. This strategy has also been exposed to liquid stocks during these years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. Additionally, the strategy had less exposure to high-momentum stocks compared with Morningstar Category peers in recent months. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. 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 consumer cyclical and industrials relative to the category average by 11.4 and 6.4 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and healthcare, underweight the average by 6.1 and 6.0 percentage points of assets, respectively. The strategy owns 61 securities and is quite concentrated. More concretely, 28.7% of the strategy's assets are housed within the top 10 holdings, versus the category average of 23.2%.