Aditya Birla Sun Life Midcap Fund – Direct Plan

ISIN CODE INF209K01Q30

Overall analysis

3-yr rolling excess returns is in the range of -5-6% and tracking error against benchmarks have been in the 4-6% range which is good overall; but the funds’ performance in the short run has been deteriorating. The fund has not given the maximum excess return in comparison to its peers; but has dropped to below the third line (median) over the past 3 years.

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’s 3-year rolling return chart shows that after Nov-2018 the fund has performed low compared to the third green median line. The fund’s maximum rolling return is 5.05% and the minimum rolling return is -6.50%.

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.

Initially, the fund outperformed the benchmark while posing a relatively low risk, but after November 2017, the fund has underperformed the benchmark with relatively lower risk. 

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.

The TE of the fund has not been that good at the start which was around 2-4% but after Mar 2019 it has gone up 4-6.6% which is considered to be a reasonably active range.

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 of the fund was low from the start but after Jan 2022 the IR of the fund has gone above 1 but again it came down till -1.7 in May 2023 which is not ideal.

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 shows that the fund is typically 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 more on the growth side, yield of the fund is low, momentum of the fund is close to high but it’s currently lower than the category average, quality is high, volatility of the fund is very low, liquidity of the fund is also low and size is around the small side.

Prepared by Bhavesh Mahajan, Aug 2023.

Aditya Birla Sun Life Midcap Fund – Direct Plan

ISIN CODE INF209K01Q30

Overall analysis

3-yr rolling excess returns is in the range of -5-6% and tracking error against benchmarks have been in the 4-6% range which is good overall; but the funds’ performance in the short run has been deteriorating. The fund has not given the maximum excess return in comparison to its peers; but has dropped to below the third line (median) over the past 3 years.

Performance analysis 

Rolling returns – 3yr rolling excess returns over 7 years 

Snail trail – 3y rolling excess over 7yrs

Tracking error – 1yr rolling over 7yrs

Information ratio – 1yr rolling over 7yrs

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’s 3-year rolling return chart shows that after Nov-2018 the fund has performed low compared to the third green median line. The fund’s maximum rolling return is 5.05% and the minimum rolling return is -6.50%.

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.

Initially, the fund outperformed the benchmark while posing a relatively low risk, but after November 2017, the fund has underperformed the benchmark with relatively lower risk. 

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.

The TE of the fund has not been that good at the start which was around 2-4% but after Mar 2019 it has gone up 4-6.6% which is considered to be a reasonably active range.

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 of the fund was low from the start but after Jan 2022 the IR of the fund has gone above 1 but again it came down till -1.7 in May 2023 which is not ideal.

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 shows that the fund is typically 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 more on the growth side,yield of the fund is low, momentum of the fund is close to high but it’s currently lower than the category average,quality is high,volatility of the fund is very low,liquidity of the fund is also low and size is around the small side.

Prepared by Bhavesh Mahajan, Aug 2023.