Union Largecap Fund Regular Reinvestment of Income Distribution cum capital withdrawal INF582M01CS1

Union Largecap Fund earns a Below Average Process Pillar rating.

The process is bolstered by the firm's retention rate of the firm's portfolio managers, which is 83% over the timeframe for which data is available, up to five years. However, the rating is weakened by the fund's unimpressive 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. Being an actively managed strategy also detracts from the process. Historical data, like Morningstar's Active/Passive Barometer, shows that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy owns more growth stocks than its peers in the Large-Cap Morningstar Category. But in terms of market capitalization, it is on par with peers. Examining additional factor exposure, the managers have been consistently underweighting yield compared with the Morningstar Category peer over recent years. Returning capital to shareholders often is not the highest priority of such businesses. The shares of such companies can deliver strong returns if they fulfill their growth projections, but they also carry more risk. In the latest month, the strategy was also less exposed to the Yield factor compared with Morningstar Category peers. This strategy has also demonstrated more exposure to high-momentum stocks over peers in recent years. Momentum is based on the premise that stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. Given the high trading volume of holdings, this fund also tilts toward liquid assets. 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. Nevertheless, the fund's Liquidity 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 has allocations in its top two sectors, industrials and consumer cyclical, that are similar to the category. The sectors with low exposure compared with category peers are consumer defensive and energy, with consumer defensive underweighting the average portfolio by 2.6 percentage points of assets and energy similar to the average. The portfolio is positioned across 49 holdings and its assets are more dispersed than peers in the category. In particular, 48.1% of the fund’s assets are concentrated in the top 10 fund holdings, compared to the category average's 51.8%. And finally, in terms of portfolio turnover, on a year-over-year basis, 130% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.