INF109K014O9
Overall analysis
3-years rolling excess returns of the fund is currently underperforming by -0.7%. Overall, this fund has moderate TE (moderately active). IR is low which is not ideal and the fund Is not providing risk-adjusted return. This fund is turning towards- taking positive risk to generate returns for its investors.
Performance analysis
Rolling returns – 3 years rolling excess returns over 7 years.
Snail trail – 3 years rolling excess risk/return over 7 years.
Tracking error – 1yr rolling tracking error.
Information ratio – 1yr rolling information ratio.
Rolling returns in quartiles
The rolling return chart shows excess 1Y-year rolling return 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 rolling excess returns are sometimes overperforming as well as underperforming against benchmark throughout the chart; sometimes it has generated returns more than its peers & benchmark with the highest return of 2.5%. According to the fund indicator shown in chart; it is struggling around upper quartile, median & lower quartile. Currently the fund is underperforming with the negative returns of -0.71%.
Rolling risk/return (Snail-trail)
The rolling risk/return chart shows excess 1-year annualized returns relative to the index. The top left quadrant would indicate higher returns with lower volatility than index.
Snail trail Indicator has its track around top left & bottom left quadrant which means; Fund took negative risk throughout the time & generated positive as well as negative returns. In its earlier stages it had a good record of 3 years rolling excess risk/return, but lately it had negative returns, it is trying to take more risk to generate returns; as we can see in the chart at the ending point – it is moving towards the bottom right quadrant which says positive 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 1-3% range considered to be low TE, 3-6% range considered to be moderately active and anything higher than 6% is high TE. Funds with TE of less than 2% can be considered to be closet indexers.
1 year rolling tracking error is within the levels of 3-7%. Highest peak tracking error of this fund is 7% in the month of March 2019. Overall, it has moderate TE; it is mildly active, the funds TE is around 4% in June 2023.
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 1 year rolling information ratio of this fund is 0.5 as of June 2023 which indicates least skills, and had the highest IR of approx. 2.
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 centroid indicator of this fund lies at the top right corner which states that; portfolio of this fund contains large cap stocks with 2 categories (blended & growth). Ownership zone indicator indicates that the fund has weightage around all the caps (small, mid & large) with all the 3 categories (value, blended & Growth) stocks. Whereas the mid cap (yellow) indicator indicates that its category funds has holdings only in mid & large cap- under the category of blended & growth.
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.
Morningstar’s factor profile shows that the portfolio has its most weightage over growth stocks, returns of the fund is low; similar to its peers. Overall volatility & liquidity of the stocks lying in the portfolio has declined in the 5 years historical range & stands at low point, momentum of the fund stands out between low & high, but it has less momentum as compared to its peers. Quality of the stocks is somewhere around average & its peers quality picks are also similar to this fund
Prepared by – Hemanth Reddy, August 2023
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