INF209KB1Y49
Overall analysis
1-yr rolling excess returns of the fund has been negative most of the time, TE shows that the fund is moderately active as the TE fluctuated between 4%-4.90%. IR is also declining month by month which also concludes that the fund is less active & inconsistent in generating risk adjusted returns.
Performance analysis
Rolling returns – 1 year rolling excess returns over 2 years.
Snail trail – 1 year rolling excess over 2 years.
Tracking error – 1 year rolling over 2 years.
Information ratio – 1 year rolling over 2 years.
Rolling returns in quartiles
The rolling return chart shows excess 1Y-year rolling return 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 1 year rolling return chart shows, in June 2022 the fund was performing around median, in January 2023 it overtook the median & generated highest return of 1.09% in the month of April 2023, then further the returns declined till date, currently it has negative returns of -2.25%
Rolling risk/return (Snail-trail)
The rolling risk/return chart shows excess 1-year annualized returns relative to the index. The top left quadrant would indicate higher returns with lower volatility than index.
1 year after inception i.e In June 2022 the fund took negative risk of -0.2% and generated 1 year rolling return of 3.70%. Currently it has negative risk/return (risk of -0.7% & 1 year rolling return of -2.25%).
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 1-3% range considered to be low TE, 3-6% range considered to be moderately active and anything higher than 6% is high TE. Funds with TE of less than 2% can be considered to be closet indexers.
This chart shows that the fund started with TE of 4.30% in the month of June 2022 which indicates that the fund is moderately active, in March 2022 it touched the highest TE.
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.
Information ratio of this fund has been declining throughout the months. It was at the peak of 0.86, later it started declining. The superior risk adjusted performance slumped.
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 centroid in Morningstar’s stock style chart of this fund shows that; the fund has its holding weightage moreover in large cap stocks and the particular stocks held are growth stocks. Their peer categories centroids are also somewhere around this fund’s centroid.
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.
- Style: This fund has invested in growth style stocks & the fund’s indicator is close to its peers category average. From the 5 years historical range; point of view it is growing & exceeding its category average.
- Yield: The returns are towards low but, as compared to its category average it has similar returns as its peers.
- Momentum: this key factor indicator of the fund states that the momentum of the stocks in the portfolio is similar to its peers, it has been fluctuating drastically from low to high.
- Quality: This fund lacks quality picks, if we look at 5 years historical range it is below its peers category average.
- Volatility: Volatility of the stocks held in this fund’s portfolio is quiet low, although its peers category are also similar
- Liquidity: Overall stocks held in the portfolio are quite illiquid; as the fund’s indicator is towards the low side & on the other hand, its peers also have illiquid stocks in its portfolio.
- Size: It is below the level of the category average indicator; pointing towards (small) side.
Prepared by – Hemanth Reddy, August 2023
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