ISIN INF174K01KT2
Overall analysis
3-yr rolling excess returns has crossed 10% in december 2020 and it has given higher returns against the benchmark and TE range is above 6% which indicates that the fund is active, but the funds’ performance in the short run has been deteriorating. The fund had given a high excess return in comparison to its peers; but has dropped to below the first quartile over the past 1 year.
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 the third green median line and upper quartile, which indicates that the fund is 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 shown impressive 3-year excess returns, touching 10% per annum and a significant time around the 4-6% pa, whilst lower than index volatility of 2-3% pa. However, the excess return came down to around 2-6% 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 ranges between 4-6%, and currently it is at 5.7% which indicates that the fund is very 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 IR is below 1 and it was 0.86 at the end of June,2023, which means it is not ideal and doesn’t indicate skill.
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 factore profile chart shows that the fund is growth oriented. The momentum factor has shown a wide range in 5-yrs historical range and category average whereas volatility factor is low in category average. Yield and liquidity factors are low.
Prepared by – Dhruvi Shah, August 2023
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