Union Focused Fund Direct Reinvestment of Income Distribution cum capital withdrawal INF582M01FT2

Union Focused Fund earns an Average Process Pillar rating.

The most meaningful contributor to the rating is the firm's retention rate of the firm's portfolio managers, which is 83% over the available data period, up to five years. The size of the portfolio management team also bolsters the process. With two portfolio managers, the fund is reasonably well-resourced. However, the process is limited by the fund's unremarkable 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 sticks with larger market-cap firms compared with the average fund in its peer group, the Focused Fund Morningstar Category. But in terms of style (value/growth) exposure, it does not have much of a bias and resembles the category's typical portfolio. Examining additional factor exposure, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. The managers have also tended to underweight yield compared with peers during 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 most recent month, however, the fund's Yield exposure was in line with the Morningstar Category average. Furthermore, the strategy had similar exposure to high-volatility stocks compared with Morningstar Category peers in recent months. 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 technology and industrials relative to the category average by 5.8 and 3.9 percentage points, respectively. The sectors with low exposure compared with category peers are basic materials and financial services, underweight the average by 6.3 and 6.1 percentage points of assets, respectively. The strategy owns 30 securities and is quite concentrated. Specifically, 53.5% of the fund’s assets are housed within the top 10 holdings, versus the typical peer's 33.9%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 155% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.