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Reasons Quant Mutual Funds are giving stellar returns
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.
1. 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.
2. 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.
3. 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”.
4. 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.
February 26, 2022
5 Myths About Investment

Investment is a pathway to fulfill your financial goals, accrue retirement fund, and live a life full of satisfaction. There are several investment assets like stocks, equities, real estate, gold, mutual funds, commodities, etc. Investment as a medium to generate money is proliferating ten folds among mass investors.

While there are numerous advantages of investing, including tax-saving and risk-free investments, there also exist some myths which become a hindrance for potential investors. Here are some misconceptions about investing money:

Investment Needs Huge Amount of Money

Having a substantial amount of money always provides exposure to more investment opportunities, but investing a moderate sum can also result in high returns over time. For example, it’s easy to look at र 5000 investment in saving and think that buying stocks is not worth the effort. After all, an 8% return on र 5000 is only र 400, which won’t be enough for retirement. It is rightfully said that investors don’t become wealthy overnight by financing र 5000 in a diversified portfolio of stocks. Though the potential of the share market lies in compounding returns. So, if you invest र 5000 per year in the stock market and make 8% annual return, your portfolio would be worth more than र 500,000 within 30 years. If you want to build a big corpus in the future but do not have adequate funds to invest now, you can even start investing as small as INR 1000 every month through SIP (systematic investment plan) route.

Stock Value Increases with Time

The purpose of investing in the share market is to buy stocks of a business at a reasonable price, such that in the future it proves to be lucrative for you. If the company has a decent business, it won’t matter if it is large, small, and/or has tremendous goodwill. Therefore, buying the stocks of companies only because their market value and price has dropped will get you nowhere, you should do thorough research before making a purchase decision. For example, X is a big company whose share price was at its all-time high at INR 1500 six months ago but has since dropped to INR 550. B is a smaller company whose share price has risen from र 200 to र 600. Mostly, every naive investor will buy the shares of A company thinking that the share price of A will rise eventually as it is a big company. However, investing in company B would have actually benefited the investor.

Stock Market is another Gambling

A lot of people think that investing in the stock market is another way of gambling. It is far more dependent on how lucky you are. This is a very wrong and insane impression. Investing in the stock market is in itself a great skill. When you buy shares of a company, you have a right to the assets, liabilities, and a small section of the profits of the company. Therefore, the difference between buying stocks of companies and gambling is that you are speculating on the future of the company and a past record that you can track. The key to investing in the stock market is doing research and adopting a safe technique such as value investing. You can buy stocks of a company at a lower value and keep them till you get a profitable return on investment.

Demat Account is Mandatory for Investment

When it comes to the mutual fund industry, an individual only needs a PAN card, a bank account, and a one-time process of filling up a Know Your Customer or KYC Form. The basic requirement is you must know how to open Demat account, which is needed to trade in the stock market. It stores your shares in digital form. However, if you want to invest in mutual funds, it is not mandatory to have a demat account. You can start your investment through SIP’s.

Reputed Companies will Give Higher Returns

While investing based on your knowledge of a company may have particular benefits, there are also some disadvantages associated with it. Depending on the industry, the stocks of famous companies may still be volatile and vulnerable to unexpected changes in the market. You should be open to studying the brands that may not be big players but have a well-built and strong business model.

The investment seems to be simple but at times demotivates people due to some misconceptions about it. To summarize the points mentioned above, investing in the share market presents you with the ability to invest in different asset classes with minimum to moderate to high risk depending on your risk-taking ability.

November 17, 2019
A Complete Guide on REIT

Every individual looks for expanding his/her investment portfolio. With a variety of investment options available in the market, it often becomes difficult to choose which investment one should opt for.

There are a lot of financial characteristics to consider before building your investment portfolio. These things include tax rates, liquidity, gains, etc.

Real estate investing can be a major impetus to your financial portfolio. It can quite literally accelerate your journey to riches if done correctly.

Most of the time, real estate investing is often associated with owning properties and leasing them out. However, there is more to real estate investing than just this. Real Estate Investment Trusts (REIT) are an important component of real estate investing.

What is a REIT?

The full form of REIT is Real Estate Investment Trust.

It is just like a mutual fund. So this brings us to our question, what is a mutual fund?

Mutual funds essentially make use of pooled money from a variety of investors to buy financial assets like stocks, bonds, etc. Then, the gains from these financial assets are divided proportionately among the mutual fund investors.

Similarly, REIT pools money from a variety of investors to buy real estate and then generate income. It allows individual investors to earn a portion of that income-producing real estate.

These real estate portfolios are made with multiple property types. REIT indulges in buying properties and leasing the real estate to other companies/individuals. The income which is generated as a result of leasing out or selling is then distributed proportionately among shareholders.

Also, REIT is specific to one particular locality of the town/city. Therefore, you must choose the specific location you prefer to invest in.

Also, REIT is of different types, categorized into many sections including medical REIT, office REIT, residential REIT, retail REIT, etc.

Healthcare REIT includes nursing homes, medical offices, hospitals, and clinics. Office REIT includes business offices, business districts, etc. Hence, there are a lot of varieties of which REIT available in the market.

Advantages of REIT

Everything in life has advantages and disadvantages just like it is said there are two sides to everything: a bright and a dark side.

Any and every financial decision requires careful analysis before investing. Gauging the pros and cons before going for REIT is very fundamental.

These are some of the advantages of REITs:

Diversification

Diversification is the key mantra underlying investing.

One of the first things to keep in mind while building an investment portfolio is to diversify it. The old saying, “Don’t put all your eggs in one basket” holds true here.

Putting all your money into a single investment is never a good idea.

Rather than investing in one stock or one mutual fund, investing in various assets is a better way to guard against market fluctuations. REITs are very similar to mutual funds in their approach and thus are a good option to add to your investment portfolio.

Time

REITs can prove to be very good investment options when invested in for a long period of time. Also, REITs come with a lot of time flexibility.

Investing for long-term should be your priority if you wish to earn some major gains.

Liquidity

While it is easy to believe that selling houses is difficult, it is not entirely true.

When you invest in a REIT, selling houses and getting back your money is way easier. It is a relatively liquid way of investing in real estate.

Simple Tax Calculation

The gains on REIT are charged for taxes just like other incomes. There is no complexity in the calculation of taxes and the whole procedure is really simple.

Disadvantages of REIT

While there are a lot of convincing arguments in favor of REIT, there are certain downsides to it as well. Before investing, one should think about the downside as well. Here are some disadvantages or drawbacks:

Property Taxes

While property taxes would not affect you directly as an investor in REIT, they would however have an indirect bearing on your gains.

How?

Because property taxes can decrease the earnings you get from the REIT.

Also, property taxes vary from place to place. So you must keep a check on the property rates in the locality you are willing to invest.

Interest Rates

Whenever interest rates go up, REIT prices dip. While some people may consider this as an opportunity to sell and earn good money, it is important to keep in mind your long-term investment goals.

The decision to sell or hold your REIT should be based on your financial goals rather than the market situation.

Tax

The gain from REITs is often considered as an ordinary income instead of as a capital gain. Hence, the gains from your REIT are charged at a higher tax rate than capital gains.

How to proceed with REIT?

Now that you’ve gauged the advantages and disadvantages of REITs, you can choose whether it’s a good option for you to invest in.

But how would you approach REIT?

Research

Similar to any financial investment, you must do an ample amount of research. Read about which companies are better, which REITs give better returns, and which localities are better to invest in.

REITs or Mutual Funds that invest in REITs

You can either invest directly in REITs or choose to invest in mutual funds which then invest in REITs further. The second approach is better for those looking for little effort and greater gains.

Conclusion

On the off chance, you are looking to increase your income level and up your investment game, Real Estate Investment Trust is made for you.

Turbocharge your investments with this simple technique. If you have big-time aspirations for your financial situation, it is time to diversify your portfolio with real estate.

If you are willing to invest in real estate but wish to avoid its high risk, lack of liquidity, etc., then you must opt for REIT after carefully analyzing its pros and cons.

I hope this helped!

By HomeLight Homes

September 28, 2019