Publish Date:
Quant Mutual Fund has launched an open-ended equity scheme - Quant Quantamental Fund.
It is an open ended equity scheme investing based on a quant model theme.
The investment objective of the Scheme is to deliver superior returns as compared to the underlying benchmark over the medium to long term through investing in equity and equity related securities. The portfolio of stocks will be selected, weighed and rebalanced using stock screeners, factor based scoring and an optimization formula which aims to enhance portfolio exposures to factors representing ‘good investing principles’ such as growth, value and quality within risk constraints. However, there can be no assurance that the investment objective of the scheme will be realized.
The scheme is mandated to invest 80% to 100% of its total assets in Equity and Equity related instruments, upto 20% of its assets in debt and money market instruments. It can also invest upto 5% in Units issued by REITs & InvITs.
As per the Scheme Information Document, Quantamental combines the innate human ability to adapt, adding to the alpha generated by discipline and identification of underlying factors -adaptive alpha, providing the edge needed to manage volatility and utilize periodic market imbalances to the portfolio's advantage.
The fund house may, from time to time, review and modify the Scheme’s investment strategy if such changes are considered to be in the best interests of the unitholders and if market conditions warrant it. No assurance can be given that the fund manager will be able to identify or execute such strategies.
The fund will invest in stocks from a universe of NIFTY 500 TRI selected on the basis of a quantamental models.
Quantitative methods will be used for (i) screening mechanism to choose best picks and make the stock selection universe smaller, (ii) Deciding on the portfolio weightage for better return as the investment will focus on company’s size and liquidity.
The qualitative model which will be used for stock selection will be based on two broad parameters viz., Stock Price movement & Financial/ valuation aspects. The model will use aspects like:
• Stock Price related parameters – This would include stock specific aspects like relative strength, liquidity and volatility, Historic Performance (based on quarterly and annual relative and absolute price movement).
• Financial/ Valuation parameters – This would include aspects based on a company’s Balance sheet, cash flow statement & profit & loss account. The parameters are Sales growth (Historical), Earning before Interest and tax (EBIT) & Free Cash flows. (Historical), Dividend yield, Price to book ratio (PB), Return ratios, etc.
The portfolio will be reviewed on dynamic basis and changes will be made based on the data generated by the model and on the discretion of the fund manager. The change in the portfolio involves both sale and purchase, both partial and complete, of the existing stocks and purchase of new stocks, if any.
Quant Quantamental Fund’s performance will be benchmarked against Nifty 500 TRI (Total Return Index).
The fund will be managed by Mr Sandeep Tandon, Mr Ankit Pande, and Mr Sanjeev Sharma.
The NFO opens for subscription on April 13, 2021, and closes on April 27, 2021. The scheme will reopen for continuous sale and repurchase within 5 business days from 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).