ISIN INF789F1AUQ1
Overall analysis
1-yr rolling excess returns of the fund ranges between 2-8% and TE of the fund is above 6%, 1-yr rolling excess return is low compared to benchmark but the TE of the fund is reasonably active, also the funds’ performance in the short run has been deteriorating. The fund has dropped 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 1-yr rolling excess return chart shows that the blue line is below the third green median line.1-yr rolling excess return was -2.96% in June 2023 which means the fund is not performing well compared to the median.
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 higher than index volatility of 2-3% pa. However, the excess return came down to around -2% towards the end of June 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 in the range is above 6% and in June 2022 it was 9.09% but later it started deteriorating, and it came down to 6.49%, the fund range is more than 6% which indicates that the fund is 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 fund IR in july and september touched 1.45 and 1.50 but later it decreased. It is clear from the above chart that the IR of the fund is below 1 from march 2022 to june 202 and from november 2022 to june 2023, it came down to -0.46, which means the fund is not 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 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 factor profile chart shows growth oriented style with historical range towards the growth and compared to the category it is slightly high. Momentum factor has shown a wide range over the past 5 years, quality is high whereas the volatility factor has also shown a wide range, and liquidity is low.
Prepared by – Dhruvi Shah, August 2023
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