Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, clearly defined, repeatable execution. Undiscovered Managers Behavioral Val Fd earns an Above Average Process Pillar rating.
This strategy targets deeper value plays than its peers’ average in the Small Value Morningstar Category. But in terms of market-capitalization, this strategy is on par with peers. Analyzing additional factors, this strategy favors low-quality stocks. Such positions do not tend to provide much ballast for a portfolio. The strategy is also historically less exposed to the factor compared with Morningstar Category peers. The managers have also tended to overweight yield, shown by the portfolio's high exposure to dividends or buybacks. Higher-yielding stocks can increase income, but some dividend-payers also might cut their payouts when earnings fall. And compared with category peers, the strategy historically has had more exposure. Additionally, this strategy has demonstrated a bias to high-momentum stocks. Momentum is based on the premise that market outperformers will continue to outperform, and the laggards will continue to lag. This means that managers are overweighting stocks currently on a winning streak. However, the portfolio has less exposure than its Morningstar Category 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 financial services and consumer cyclical relative to the average peer in its category by 6.8 and 5.5 percentage points in terms of assets, respectively. The sectors with low exposure compared to their category peers are technology and industrials, underweight the average by 5.2 and 4.7 percentage points of assets, respectively. The strategy owns 94 securities and is similarly concentrated in the top 10 holdings as the category average, 28.7% of assets. And finally, in terms of portfolio turnover, this fund trades less regularly than the typical peer in its category, which may result in a lower cost to investors.