Bank of India Small Cap Fund Direct Growth INF761K01EP7

Bank of India Small Cap Fund earns an Average Process Pillar rating.

The leading factor in the rating is the parent firm's five-year risk-adjusted success ratio of 65%. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Excellent risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. However, the process is limited by its parent firm's disappointing risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.6 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy has more exposure to the Growth factor than the Small-Cap Morningstar Category average. But in terms of market capitalization, it is on par with peers. Examining additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum is based on the premise that market outperformers will continue to outperform, and laggards will continue to lag. This means that managers are overweighting stocks currently on a winning streak. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy has also leaned away from the stocks of companies with high dividend or buyback yields over these 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. Similarly, in recent months, the strategy also had less exposure to the Yield factor than peers. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This is 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 basic materials by 5.4 percentage points in terms of assets compared with the category average, and its technology allocation is similar to the category. The sectors with low exposure compared with category peers are consumer cyclical and industrials, underweight the average by 6.5 and 3.1 percentage points of assets, respectively. The portfolio is composed of 71 holdings and is quite concentrated. Specifically, 25.8% of the fund’s assets are housed within the top 10 holdings, compared to the typical peer's 13.7%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 67% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.