The 3-yr rolling excess return tracking error against benchmark has been average overall. This fund gives average return and most of the time this fund is under negative return. So, this fund was not good for investment.
Rolling return 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.
Fund is going down from the starting and it also crossed the median line so it was a bad sign for the fund and it was in negative after November 2017.
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.
The Snail Trail Chart shows the major part of the fund was down the left side under 0, so it was not a good sign. only some minor part of the chart on above 0.
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 3-6% range considered to be barely active, >6% range considered to be reasonably active and anything higher attributed to concentrated/focused funds. Funds with TE of less than 3% can be considered to be closet indexers.
The Tracking Error of the Fund Shows the major months are under 3% so it represents the barely active fund. This fund is closest to the index.
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 of this fund was under 1 so it was representing that this fund is not an active fund.
Prepared by – <Nisarg Patel>, August 2023