HDFC Flexi Cap Fund – Direct Plan

INF179K01UT0

Overall analysis

The 3-yr rolling excess return tracking error against benchmark has been bad overall. This fund was a volatile fund and this fund faces so many ups and downs. Also, this fund gives average and negative return, so HDFC flexi cap fund was not good for investment.

Performance analysis

Rolling return 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.

3 years of rolling return charts show the blue line touched again and again to the median line so it is an indicator that the fund was not doing well. 

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.

The fund faces so many ups and downs, a major part of this fund was in the top right side. at a time, the fund touched to 6.96% and -5.23%.

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 3-6% range considered to be barely active, >6% range considered to be reasonably active and anything higher attributed to concentrated/focused funds. Funds with TE of less than 3% can be considered to be closet indexers.

The tracking error of this fund shows so many ups and downs but most of the time the fund is running between 2% to 8%.

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 the fund is running between -2 to 2 only once the fund was going into -4.5. The fund was not an active fund. 

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.

This fund was a large cap blend 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.

This fund is a growth fund compared to 5 years, and currently the fund has low volatility and low liquidity. Also the quality of this fund is very low compared to category average. 

Prepared by – <Nisarg Patel>, August 2023