ISIN CODE INF903J01MJ3
Overall analysis
3-yr rolling excess returns is in the range of -7-7% and tracking error against benchmarks have been in the 4-6% range and currently it is 0 which is not good and the funds’ performance in the short run has been deteriorating. The fund has not given the maximum excess return in comparison to its peers; but has dropped to below the third line (median) over the past 5 years.
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 fund’s rolling return initially outperformed the third green median line, but in March 2019, it started to underperform the median line, which is not good. The maximum rolling return is 7.23% and the minimum rolling return is -7.46%.
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 fund initially exceeded the benchmark while carrying a somewhat greater risk, but after February 2018 it did the opposite while carrying a relatively lower risk, which is not ideal.
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 fund’s tracking error has frequently been in the 4-6% range, which is considered to be a reasonably active area. Once it exceeded 6%, which is fine, but after October 2022 it decreased to zero, which is not ideal.
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 fund’s information ratio was formerly favourable, but it declined below 1 after March 2017, which is not ideal.
Prepared by Bhavesh Mahajan, Aug 2023.
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