Franklin India Prima Fund – Direct 

ISIN CODE INF090I01FH9

Overall analysis

3-yr rolling excess returns is in the range of -6-7% 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 given the maximum excess return in comparison to its peers; but has dropped to below the third line (median) over the past 2 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.

Initially the fund has given good rolling return compared to the third green median line but after Feb 2021 it crossed the third green median line which indicates that the fund started performing low compared to the median line. The fund’s maximum rolling return is 6.46% and the minimum rolling return is -8.37.

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 has outperformed benchmark with relatively lower risk but after Sep 2017 it has underperformed 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.

Initially the TE of the fund was reasonably active, in the range between 4-6% but in Oct 2021 it dropped till 2.6% which is considered to be closer to the index.

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.

Initially the information ratio of the fund was very low but in July 2019 it went above 1 and then again it fell below 1 after Nov 2019, 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 high,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.

Franklin India Prima Fund – Direct 

ISIN CODE INF090I01FH9

Overall analysis

3-yr rolling excess returns is in the range of -6-7% 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 given the maximum excess return in comparison to its peers; but has dropped to below the third line (median) over the past 2 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.

Initially the fund has given good rolling return compared to the third green median line but after Feb 2021 it crossed the third green median line which indicates that the fund started performing low compared to the median line. The fund’s maximum rolling return is 6.46% and the minimum rolling return is -8.37.

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 has outperformed benchmark with relatively lower risk but after Sep 2017 it has underperformed 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.

Initially the TE of the fund was reasonably active, in the range between 4-6% but in Oct 2021 it dropped till 2.6% which is considered to be closer to the index.

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.

Initially the information ratio of the fund was very low but in July 2019 it went above 1 and then again it fell below 1 after Nov 2019, 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 high,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.