Kotak ESG Exclusionary Strategy Fund Regular Reinvestment of Income Distribution cum Cap Wdrl INF174KA1FG8

Kotak ESG Exclusionary Strategy Fund earns a High Process Pillar rating.

The leading factor in the rating is its parent firm's superior long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.5 stars. The parent firm's five-year risk-adjusted success ratio of 63% also influences the rating. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Their noteworthy success ratio suggests that the firm does well for investors and that this fund may benefit from that. The firm's five-year retention rate of 83% supports the rating as well.

This strategy prefers more value-oriented stocks compared with the average fund in its peer group, the Equity - ESG Morningstar Category. But in terms of size exposure, it does not have much of a bias and resembles the typical portfolio. Looking at additional factor exposure, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last 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's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these years. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. In addition, this strategy has an underweight bias to the volatility factor, meaning investing in stocks that have a lower standard deviation of returns. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. Nevertheless, the fund's Volatility 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 basic materials and communication services relative to the category average by 7.2 and 3.1 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and industrials, underweight the average by 7.0 and 2.9 percentage points of assets, respectively. The portfolio is composed of 46 holdings and is relatively top-heavy. Of the strategy's assets, 51.1% are concentrated within the top 10 holdings, as opposed to the category’s 39.6% average.