ITI Small Cap Fund – Direct Plan – Growth 


Overall analysis 

1-yr rolling excess returns has been in negative and TE ranges above 6% but in June 2023 came down to 5% it indicates that the fund is active. The funds’ performance in the short run has been deteriorating. The fund has also not  given the high excess return in comparison to its peers. The snail trail chart shows the the returns are low with less risk taken.

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 shows that the blue line is below the third green median line and upper quartile, which indicates the fund is not better than median performance.

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 not shown impressive 3-year excess returns, the fund is in negative from the start and it is currently around 9%.

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 ranges between 4-6%, which indicates that the fund 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 above 1, and currently the fund ranges at 1.14 which is higher than 1 means it is ideal and indicates skills.

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 blend of large, mid and small 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 is growth oriented. The momentum factor has shown a wide range in the 5-yrs historical range. Liquidity factor has shown low category average whereas the volatility factors of 5 yr historical range is also wide.

Prepared by – Dhruvi Shah, August 2023


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