IIFL Focused Equity Fund – Direct Plan 

ISIN INF579M01902

Overall analysis 

3-yr rolling excess returns has given high returns against benchmark and TE ranges between 4-6% which indicates the fund is active. The fund has a high TE. IR above 1 makes this an active fund. The fund has performed magnificently as compared to its peer.

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 return shows that the fund was above the third median line from starting but performed moderately up to Feb-2019 and after Mar-2019 its 3Y-Rolling Return was outstanding touching highest of 11.79% on Nov-2021. 

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 11.79% per annum with risk of         

0.05%. However, the excess return was quite good during the past few years.

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 almost above 6% i.e. High TE. The Highest TE was shown at 11.12% during Nov-2018. While the lowest was 2.65% in June-2016.

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 0.03 on Sept-2016. Highest IR was 4.78 on Jan-2020 and lowest was -1.84 on Jan-2018. 

Prepared by – Ashutosh Sahu, August 2023