ISIN INF277K01QZ7
Overall analysis
3-yr rolling excess returns is in the range of 2-6%.Tracking error against benchmark has been in the range of 3-5% overall; but the funds’ performance in the short run has been deteriorating. The fund has given the same excess return in comparison to its peers; but has gone up 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 return of the fund is parallel with the third green median line so the fund is as good as the 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 good 3-year excess returns, touching 3% per annum and a significant time around the negative between -4-1% pa, whilst lower than index volatility of 2-3% pa. However, the excess return came down to around -3.82% in November 2020.
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 of the fund was between 2-4% most of the time in June 2016 2.75% and now it is 2.20% in June 2023 which is barely 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 at June 2016 was less than 1 and then it has gone more and more negative but now from November 2021 it has gone to 1.9 and right now it is 1.6 which is more than ideal.
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 style chart shows that the fund is typically growth oriented in a large segment.
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 has a low yield,momentum & quality is moderate, volatility & liquidity is low and size is large as compared to the last 5 yr range.
Prepared by – Shreyas Walve, August 2023
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