If you are investing in mutual funds online, you may have come across quant mutual funds. Quant Small Cap Fund has been in the news for toping all equity funds with a whopping 206% return. Quant Tax Plan Fund and Quant Focused Fund are also gaining popularity. Although the fund house is not very well known yet, its recent performance has certainly garnered enough attention for going beyond expectations. However, this is not due to a stroke of luck but careful endeavors of the asset management company.
Let’s look at the reasons why Quant mutual funds are giving stellar returns.
- Change in management: Quant Mutual Fund was earlier known as Escorts Mutual Fund. Quant Capital bought it over in 2018. The company is presently headed under Sandeep Tandon and was once a part of Reliance Securities. The change of management has contributed to the fund’s growth and made it one of the highest-performing equity mutual funds online. In fact, the fund’s Assets Under Management (AUM) have increased to Rs. 1,855 crore compared to Rs. 235 crore at the time of acquisition.
- Competent fund managers: Quant mutual funds are managed by capable and proficient fund managers. Its top fund managers include Drishti Shah, Sanjeev Sharma, Harshal Patel, and Ankit A Pande. Shah has worked with the Securities and Exchange Board of India (SEBI) and is a member of the Institute of Company Secretaries of India (ICSI). Sharma is an expert in forex management and risk mitigation from the London Academy of Professional Education. He has 11 years of experience with Quant Mutual Fund too. Patel is a member of the Institute of Chartered Accountants of India (ICAI). He also has experience in risk mitigation, asset management, corporate banking, etc. Ankit A Pande has worked in equities for over ten years and is a certified CFA.
- VLRT strategy: The fund house adopted a VLRT strategy that stands for analyzing valuation, liquidity, risk, and timing. Some Quant mutual funds have a very high portfolio turnover ratio of up to 500-600%. The mutual fund schemes buy and sell stocks frequently and make opportunistic bets. The fund house is not limited to any investment style. Instead, they are able to make quick changes. Quant’s National Sales Head, Anupam Saxena, also said the mutual funds online schemes give “1/3rd weightage to liquidity analytics and risk appetite (risk-on or risk-off) and 1/3rd to valuations”.
- Better performance than other small-cap funds: A SIP (systematic investment plan) is popular in Quant small-cap funds for various reasons. Quant’s Sortino ratio is higher than most other small caps in the market. The Sortino ratio is used to determine the fund’s possibility to fall during market corrections. A high ratio indicates that the fund can protect itself from market downside. Another metric that puts Quant mutual funds higher than others is the R-squared. R squared ratio indicates the fund’s performance in tandem with the index. The lower the number, the better it can be as the fund’s capability to outperform the index is higher than merely mimicking it.
To sum it up
Quant offers many mutual funds online that you can consider for your future goals as per your risk appetite. The Tata Capital Moneyfy App can help you invest in these funds and several others with great convenience.