INF205K01MS2
Overall analysis
3-years rolling excess returns of the fund is declining throughout the chart. Overall, this fund has moderate TE, it is moderately active. The 1 year rolling information ratio of this fund is poor. The fund is underperforming its benchmark and peers.
Performance analysis
Rolling returns – 3 years rolling excess returns over 7 years.
Snail trail – 3 years rolling excess risk/return over 7 years.
Tracking error – 1yr rolling tracking error.
Information ratio – 1yr rolling information ratio.
Rolling returns in quartiles
The rolling return chart shows excess 1Y-year rolling return 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.
Fund had a decent start during June 2016 with the 3-year rolling excess returns of 9.74% against the benchmark and then had a slight rise till the level of 10.78% & further returns are decreasing till date. From June 2016 to November 2017 the fund has performed the same as the maximum line & from December 2017 the fund has struggled around the upper quartile, median and lower quartile. Currently in June 2023 the fund has underperformed with the return of -2.48% and had less returns against its peers.
Rolling risk/return (Snail-trail)
The rolling risk/return chart shows excess 1-year annualized returns relative to the index. The top left quadrant would indicate higher returns with lower volatility than index.
The snail trail chart shows that the fund started with the risk of 1% & returns of 9.7%, The snail trail charts of this fund have its mark around all four Quadrants. As of June 2023, the fund is underperforming its benchmark with the return of -2.5%; taking least 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 1-3% range considered to be low TE, 3-6% range considered to be moderately active and anything higher than 6% is high TE. Funds with TE of less than 2% can be considered to be closet indexers.
1 year rolling Tracking error chart has couple of swings between the range bound of 3%-7%, this fund had a highest TE of 7.2% considering 1 year rolling tracking error, in past month of June 2023 the TE is at the level of 3.5%; which means the fund is moderately 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 1 year rolling Information ratio chart also has swings in it. With the highest IR of 2 against it benchmark Nifty 500 multicap 50:25:25 total return index. This fund had an IR of 0 in the recent month of June 2023; which concludes that the fund is struggling to generate risk adjusted returns.
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 centroid indicator of this fund lies at the top right corner of the box- which states that; portfolio of this fund contains large cap stocks of growth category. Ownership zone indicator bespeak that the fund has picks around all the caps (small, mid & large) with all the 3 categories (value, blended & Growth) stocks, most of the time only growth & blended securities were added to the portfolio. Whereas the mid cap (yellow) indicator indicates that its category funds have holdings only in mid & large cap- under the category of blended & growth.
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.
Morningstar’s factor profile shows that the portfolio has its most weightage over growth stocks, returns of the fund are low; similar to its category average. Overall volatility & liquidity of the stocks in the portfolio has declined in the 5 years historical range & stands at low point; again which is also same as its category average, momentum of the fund stands out between low & high, but it has less momentum as compared to its peers. Quality of the stocks is somewhere around mid-way between high & low & its peers quality picks are also similar to this fund.
Prepared by – Hemanth Reddy, August 2023
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