Why Are Quant Mutual Fund Schemes Topping The Charts?
We get a lot of queries from our readers about whether to invest in a specific fund. Recently, quite a few investors have been inquiring about funds from Quant Mutual Funds. And that is no surprise. Quant Mutual Fund has emerged as the top-performing fund in 2021 across multiple categories.
The Story Of Quant Mutual Fund
Quant Mutual Fund is a very young mutual fund company. It came into existence in 2018 when Quant Capital acquired Escorts Mutual Fund. At that time, Escorts Mutual Fund was managing only around Rs. 200 crores of investors’ money. Since then, the new management at Quant Mutual Fund has made major changes to the investment process and personnel. And the fruits of these changes are now visible in AUM growth and fund performance. Quant Mutual Fund was managing about Rs. 130 crores in assets until March of 2020. But the fund house’s AUM has now grown by over 35 times to around the Rs. 5,000 crore mark.
Stellar Returns Of Quant Mutual Fund
If you take a closer look at Quant Mutual Fund’s growth, you would notice that March of 2020 has been a pivot point. Since March 24, 2020, every equity scheme of Quant MF has outperformed its corresponding benchmark. Schemes like Quant Small Cap Fund and Quant Tax Plan Fund have outperformed their respective indices by 50% on an annualized basis.
Investment Strategy
Quant Mutual Fund’s schemes follow similar investing strategies. It perfectly fits Quant’s fund management philosophy that employs VLRT methodology for stock selection. VLRT incorporates valuation, liquidity, risk, and timing. Simply put, Quant Mutual Fund says that its approach is dynamic. The word they often use is “unconstrained”. It effectively means that their fund selection is sector agnostic. Their universe of companies is wide. The fund house is not being restricted to a particular style of investing. And as a result, they can make quick changes in their portfolio. The Quant Active Fund portfolio has a turnover rate of about 500%. It means the scheme’s portfolio was churned 5 times in the past 1 year.
Bottom Line
Quant Mutual Fund has a different but clear strategy on how it wants to run its funds. Its investment strategies do not necessarily fit within the buckets like growth, value, quality, momentum, special situation, etc. The schemes have a little bit of everything. For now, these strategies are working. And they are not just working from a performance perspective. They are doing well from a risk and downside protection standpoint as well.