IDBI Small Cap Fund – Direct Plan


Overall analysis 

3-yr rolling excess returns has not given high returns against the benchmark and TE range of the fund is above 6% and also crossed 10% in 2018, 2020 and 2021. The snail trail chart shows that the fund has given higher returns with high risk but not performed against the index.

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 rolling excess return chart shows that the fund blue line is above third green median line and upper quartile, which clearly indicates that the fund is better than the median performance. The fund is giving 2.49% whereas the median is at 0.49%.

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.

This fund has shown impressive 3-year excess returns, touching 6% per annum and a significant time around the 0-2% pa, whilst lower than index volatility of 1-2% pa. However, the excess return came down to around 2% towards the end of 2023.

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.

The tracking error chart shows that the fund range is between 6-8% maximum time on the chart and in september 2018 it touched 12%. At the end June 2023 it was around 6%, which means it is reasonably 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. 

The information ratio chart shows that the fund is below 1 but in september 2018 it was around 2 and from july 2022 to september 2022 it was above 1 and later it decreased and at the end of June 2023 the fund was around -0.21, which is very low performance.

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 Mid 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 style is growth oriented, yield is very low compared to category average, momentum and volatility factors have shown a wide range in 5-yr historical range and liquidity factor is low.

Prepared by – Dhruvi Shah, August 2023


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