IDBI Midcap Fund – Direct Plan

ISIN CODE INF397L01JK8

Overall analysis

3-yr rolling excess returns is in the range of -9-1% 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 not 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 fund’s performance is poor when compared to the third green median line, and the only time it has ever been above the median line was in August 2021. The fund’s maximum rolling return is -0.60% and minimum rolling return is -9.34%.

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.

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The fund from the start has been underperformed benchmark with relatively higher risk, which is not good.

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.

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The TE of the fund is very good from the start which is above 6% but after Feb 2023 the TE falls from 3.4% to 1.6% which is not good.

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. 

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The information ratio of the fund is not good from the start; it has consistently been below 1 and is currently -5.1, which is not ideal.

Prepared by Bhavesh Mahajan, Aug 2023.

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