Publish Date:
Axis Mutual Fund has launched an open-ended equity scheme - Axis Quant Fund.
It is an open ended equity scheme mandated to follow a quantitative model.
The investment objective of the Scheme is to generate long-term capital appreciation by investing primarily in equity and equity related instruments selected based on a quantitative model. However, there can be no assurance that the investment objective of the scheme will be achieved.
The scheme is mandated to invest 80% to 100% of its total assets in Equity and Equity related instruments of selected companies based on a quantitative model, upto 20% of its assets in other Equity and Equity related instruments. It can also hold upto 20% of its assets in debt and money market instruments and upto 10% in Units issued by REITs & InvITs.
As per the Scheme Information Document, the investment process of Axis Quant Fund will be based on a fundamental factor based approach with the aim of generating superior risk adjusted returns compared to the benchmark. The factors employed are the ones that have a strong academic basis and / or are considered central by fundamental investors in their process as can be seen from the list below.
The Universe would be screened for investability using quantitative measures like data availability, liquidity etc. and then subsequently factors described below would be used to evaluate the stocks’ attractiveness from a risk and return perspective.
The parameters that the model will consider are as follows:
Fundamental Factors:
The model will look at various factors to gauge growth outlook while considering valuation parameters for every company. For this, the aspects that the model will look at include the following:
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Return on Equity
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Sales growth
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Cash flow
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Debt to equity ratio
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Earnings growth
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Price to book
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Price to earnings
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Dividend yield
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Earnings yield
Technical Factors:
The model will look to capture the behavioral attributes reflecting in the stock price movement. For this, the aspects that the model will look at include the following:
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Liquidity
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Stock price momentum
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Volatility
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Historical performance
Risk Parameters:
While looking for the attractiveness of a stock, the model will also analyse the risk levels of the stocks. While some risks can be measured, some cannot. Fund managers may look at some quantitative factors to gauge the risk level of a stock.
For this, the aspects that model will look at are as given below:
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Volatility
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Beta
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Risk ratios
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Liquidity
Apart from the above parameters, the Fund Manager can consider other quantitative and qualitative parameters for selection of stocks.
The process from universe selection to portfolio construction would be largely systematic with the aim of maximizing the return while minimizing active risk.
The portfolio of the Scheme will be reviewed and rebalanced by the Fund Manager on monthly basis based on the output of the model.
The fund manager will also review and maintain the model (including variables) on an ongoing basis and make changes as necessary. The same will be reviewed periodically by the Investment Review Committee of the AMC.
The Scheme may also invest in equity and equity related instruments which are not a part of in house proprietary quantitative model.
Axis Quant Fund’s performance will be benchmarked against S&P BSE 200 TRI (Total Return Index).
The fund will be managed by Mr Deepak Agarwal and Mr Hitesh Das (for foreign securities).
The NFO opens for subscription on June 11, 2021 and closes on June 25, 2021. The scheme will reopen for continuous sale and repurchase within 5 business days from the date of allotment.
The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.
The fund offers Regular Plan and Direct Plan having Growth Option and Income of Distribution cum Capital Withdrawal (Payout and Re-investment Facility).