Axis Bluechip Fund-Direct Plan

ISIN INF846K01DP8

Overall analysis 

3-yr rolling excess returns is in negative which is not good for the past few years  and tracking error against benchmark has been very active overall and the funds’ performance in the short run has been deteriorating. The fund had given the maximum excess return in comparison to its peers; but has dropped to below the first quartile over the past 1 year.

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 rolling return of this fund was neutral but in March 2020 it was at its peers peak but again from June 2022 fund is below the third green median line which means it is not better than median performance.

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 impressive 3-year excess returns, touching 10.03% per annum and a significant time round the 2-6% pa, whilst lower than index volatility of 2-3% pa. However, the excess return came down to around 8.49% in March 2023.

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 Tracking Error of the fund in January 2016 was 3.67% which is considered as ideal and in August 2020 it was around 10.79% which means it was too much active but again in March 2021 it came down to 4.10% which means it is ideally 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 0.32 in January 2016 and also went to 2.79 in September 2019 and now in June 2023 is -0.62 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.

By looking at the style chart of the fund we get to know 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.

Factor profile chart shows that the fund is growth style,yield is very,momentum and quality is neutral,volatility and liquidity of the fund is very low and size is large of the fund as compared to the last 5 yr historical range.

Prepared by – Shreyas Walve, August 2023