Axis Mutual Fund launches Axis Quant Fund NFO
Fund-houses like ICICI Pru, DSP, Nippon and Tata MF already have quant funds in this small niche category which is attracting investor interest
Axis Mutual Fund has unveiled their new fund offer ‘Axis Quant Fund’, which will follow a fundamental-driven quantitative approach to investing.
This strategy through its proprietary in-house model aims to identify the strongest bottom-up stock opportunities to invest into while accounting for both risks and return prospects. Let us find out more about the product.
· This is an open ended equity scheme following a quantitative model
· The fund aims to generate long-term capital appreciation by investing primarily in equity and equity related instruments selected based on a systematic quantitative process
· The process will use fundamental factor based approach to select the best ideas on the basis of which it will construct and monitor the portfolio
· Minimum application (NFO) of Rs. 5,000 and in multiples of Re. 1/- thereafter
· NFO date: June 11, 2021 to June 25, 2021
Why quant fund
With the focus on corporate governance and resulting dramatic improvement in corporate disclosures the world of investing is witnessing a sea change in the availability of data. This changing paradigm represents a large opportunity to asset managers and promises to transform the fund management process for the better.
The successful adoption of this new wave can be done through what are known as quantitative techniques – essentially models that are trained to process this data and use it to come up with investment ideas. The specialized funds that use these approaches are called Quant funds.
Quant funds strategy
Quantitative strategy, an approach that is well entrenched in the west, is an alternate and a complementary approach to the traditional way of investing in markets.
It uses mathematical models and a systematic approach to carry out portfolio management. The strength of this process lies in its ability to analyze a large breadth of stocks and in bringing together diverse data points to identify the strongest investment opportunities.
The model also allows the manager to construct a portfolio that balances risk-return objectives. As Indian markets and systems keep maturing, these products will gain importance and will occupy an important position in the investors’ portfolio.
Axis quant fund edge
In terms of Axis Quant Fund, the model aims to select a portfolio of quality stocks with good growth prospects but at reasonable prices. This approach for selecting stocks is augmented by a disciplined risk management while carrying out portfolio construction.
The fund is suitable for investors looking at new avenues of investing to diversify their existing portfolio of funds and aiming to allocate for the long term.
The fund offers a unique proposition, combining the power of fundamentals with disciplined risk management. It aims to create diversified portfolio that has the potential to work across the market cycle.
It will have an all seasons portfolio capturing the best of fundamental styles: Quality, Growth and Valuation
The stocks will be evaluated using several fundamental parameters & weights are assigned using risk and other considerations
The portfolio will be reviewed & rebalanced periodically
On the launch of the NFO, Chandresh Nigam, MD & CEO, Axis AMC said, “The landscape of active equity investing has evolved and markets are becoming more efficient. While introducing new fund offers in the market, our constant aim has been to provide investors with a product basket that suits their needs and helps them in diversifying their portfolio, allowing them to make long term allocations.
The launch of Axis Quant Fund is our attempt to continue that journey for investors by offering them a product that can use the power of data to create long term wealth.”