ISIN INF109K012K1
Overall analysis
The 3Y rolling returns of the fund is alpha as compared to the benchmark. The TE of the fund is upto the benchmark and is actively managed. The IR of the fund is ideal and risk adjusted returns have been made.
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 3Y rolling return chart shows that although the fund started with a good start generating positive returns with 17.33% in June 2016. The fund’s returns started to deteriorate from the year 2018 to 20121 with negative returns of -6.6% in Dec 2019. The fund has generated alpha returns from the year 2022, outperforming the benchmark with 11.10% in Feb 2023.
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 snail trail chart of the fund rolling excess risk/return shows that the fund has been extremely volatile as in the start of the fund it was performing with high returns. It started to decline and moved to the bottom left quadrant which shows that the fund was under performing for sometime. The fund has been giving alpha returns since the year 2021 with negative 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.
TE of the fund has been moderate in the start. It gradually inclined in the mid 2018 and late 2020 with a high 10.1% TE. It has been around 6-9% throughout later which indicates that the fund has been extremely 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.
As the TE of the fund was moderately high, the IR of the fund is low due to adverse effects. IR of the fund has been between 0-1% which indicates that the fund is 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 of the fund is slightly different from the category average. The centroid of the fund can be seen in the large-blend section. The ownership zone of the fund shows that their are investments in mostly large cap value oriented and blend oriented funds, some investments can be seen in the growth section as well as in the mid cap section.
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 style of the fund’s exposure is closer to the blend, the historical range shows the fund also had value style. The yield section is quite low which indicates that the fund’s dividend/buyback yield is low. The momentum of the fund is quite higher than the category average, which indicates that the fund’s returns has been rising, also the 5-yr historical range is wide. The profitability is low as the quality’s exposure is closer to being low. The fund was quite volatile which can be seen in its historical range. The fund’s liquidity has a historical range but currently is low.The market capitalization is below the category average and closer to the small cap.
Prepared by – Ayushi Shervegar, August 2023
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