ISIN INF760K01FR2
Overall analysis
3-yr rolling excess returns is in the 2-5% range which is good and tracking error against benchmark has been impressive in the range of 2-6% overall. The funds’ performance in the short run has also been good. The fund had given the maximum excess return in comparison to its peers.
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 of the fund was above the third green median line from December 2017 means it is better than median performance which we can say that fund is good for investing.
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 4.11% per annum and a significant time around the 0-2% pa, whilst lower than index volatility of 2-3% pa. However, the excess return came down to around 3.02% 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 for the fund was between 2-4% in January 2016 to December 2019 and has gone up to around 6% in June 2020 which means it was too active at that time and now in June 2023 it has a tracking error at 3.33% it 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 negative between June 2016 to September 2018 but then it turned positive which is around 1 which can be called 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 of the fund shows that the fund is typically a growth oriented fund in the large cap 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 where yield is close to low and momentum is close to high and quality is moderate and volatility & liquidity is low and size of the fund is large as compared to the last 5 yr historical range.
Prepared by – Shreyas Walve, August 2023
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