IDFC Focused Equity Fund – Direct Plan

ISIN INF194K01W21

Overall analysis

3-yr rolling excess returns and TE against benchmark have not performed very well. Rolling returns in quartiles was neutral, while snail trail shows the risk & return in positive and as well as in negative. The fund has not performed well as compared 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 funds rolling return chart shows that after June-2017 it showed the good potential and gave around 3.5% Rolling Return pa but later on after June-2020 this fund goes negative.

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 shows the maximum 3Y Rolling Return: 3.76% with risk of 0.686% on feb-2020. However, on Mar-2023 it’s 3Y Rolling Return: -6.51% went negative with risk of -1.713%

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.

Tracking Error of the fund has been good at the start which was around 4-6% and it moved to 9.5% on Dec-2020 but later on 2022-23 it ranges between 4-5% which is considered to be 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 was measured in negative earlier but then it went to 3 on Aug-2017 and then came down at lowest to -4.1130 on Sep-2021. Till date after 2021 it didn’t even go up to 1, which indicates that it is not an ideal Active fund.

Prepared by – Ashutosh Sahu, August 2023