ISIN INF209K01BR9
Overall analysis
3-yr rolling excess returns is in the 2-6% range. Tracking error against benchmark have been in the range of 2-6%; but 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 returns show that the fund was above the third green median line in January 2016 but now in June 2023 it is neutral meaning it is going with the third median green line.
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 good 3-year excess returns, touching 6.83% per annum and a significant time around the 1-3% pa, whilst lower than index volatility of 2-3% pa. However, the excess return came down to around -4.89% in September 2018.
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 was around 4.50%-6.50% from January 2016 to January 2020 which means it was too active but from January 2021 to January 2023 it’s between 2-4% which is barely 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 at its peak in June 2019 which was 3 but then there was a downfall and now in June 2023 it is 0.56 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 style chart shows that the fund is in the growth segment.
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 style of the fund is nearly too high whereas yield of the fund is low,momentum is close to high,quality of the fund is moderate and volatility & liquidity is very low and the size of the fund is large as compared to the last 5 yr historical range which is good for the fund.
Prepared by – Shreyas Walve, August 2023
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