L&T India Value Fund – Direct Plan 

ISIN INF917K01HD4

Overall analysis 

The funds’ performance for the past couple of years has been moderately good. Rolling returns can be seen. This is clearly shown in the performance on the snail trai chart. Tracking error and Information ratios have shown a good correlation in performance tracking and fund management.

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.

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The funds rolling return chart shows that the fund lies between the upper quartile and the median line in the start touching the high return of 17.25% and slowly started to decline towards the median giving the returns of -4.9% in Apr 2020. The fund later crossed the third median line in the year 2021 and slowly started to incline towards the upper quartile giving  returns around 2-3%. 

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 of the fund shows that the fund hasn’t been performing well since the year 2019 to 2021, as the returns were negative with lower risk. Although the returns took a positive turn towards the year 2022 and onwards. The returns were between 2-7% for a significant time, however the excess return came down to 2% by the end of Apr 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.

TE of the fund was highly active at the beginning and then further it was moderately active as it declined to 2% in 2019.Later the fund’s TE has performed well between 3-6% till the end 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 of the fund is less than 1% most of the time throughout the chart and has crossed 1% between Mar 2021 to Jan 2022. Later it declined to -0.5% in Jul 2022. Currently the IR of the fund is at 1.6%.

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.

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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.

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Prepared by – Ayushi Shervegar, August 2023