ISIN INF209K01WE3
Overall analysis
3-yr rolling excess returns is low compared to benchmark and first quartile and TE against benchmark have moderately active during 2016-17 but then started declining. While snail trail shows the risk & return in positive and as well as in negative. Tracking Error of the fund has been constant 3-6%.
Performance analysis
Rolling returns in quartiles
The rolling return chart shows excess 3-year annualised returns in context of peer return quartiles. The blue line’s time above the third green median line indicates the fund’s better than median performance.
The fund chart shows that in May-2016 the excess return was 6.08% which is above the third green median line but later it started declining and it went negative to the lowest -3.49% during Apr-2023, which clearly indicates that the fund is not performing better than median performance over the last 3 years.
Rolling risk/return (Snail-trail)
The rolling risk/return chart shows excess 3-year annualised returns relative to the index. The top left quadrant would indicate higher returns with lower volatility than index.
This fund has shown exemplary 3-year excess returns, touching 6.08% per annum with risk of 0.052%. However, the excess return came down to around -3.53% per annum with risk of 0.555%, which clearly indicates the downfall of the fund over past years.
Tracking error
The tracking error chart shows how the fund ‘tracks’ against the index. The higher the TE, the more active the fund’s return has been, with the 2-4% range considered to be barely active, 4-6% range considered to be reasonably active and anything higher attributed to concentrated/focused funds. Funds with TE of less than 2% can be considered to be closet indexers.
Tracking Error of the fund has been low at the start i.e. 1-3% and then through years it showed constant 3-6% which showed it has been moderately active.
Information ratio
The information ratio is a measure of ‘risk-adjusted return’ as it’s the excess return per unit of excess volatility. Active funds should have IR of higher than 1, ideally higher than 1.3 at least to indicate skill.
The Information Ratio was measured at maximum i.e. 4.73 in May 2014, and then it started declining to -2.6820 in Aug-2018. However, in Jan-2020 it again went to 2.68 and is currently measured at negative in 2023.
Portfolio analysis
Stock style chart
Morningstar’s stock style chart shows the ‘style’ of the stocks in the portfolio in terms of size and value/growth style. The centroid shows the weighted average while the zone circle shows how varied the stock styles are.
The stock style chart of the fund shows the fund is a large cap growth fund.
Factor profile chart
Morningstar’s factor profile shows the historical style analysis of the stocks in the portfolio in terms of size, value/growth style and other key factors. The blue circle shows the fund relative to the black dot for the category average.
The factor profile chart shows that the fund is growth oriented, yield is low, momentum factor is showing a wide range, liquidity of the fund is low compared to 5 yr historical range.
Prepared by – Ashutosh Sahu, August 2023
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