Axis Mutual Fund has announced the launch of their new fund offer – ‘Axis Quant Fund’, following a fundamentally driven quantitative approach to investing. This strategy uses a model that aims to identify the strongest bottom-up stock opportunities to invest in while accounting for both risks and return prospects.
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 disciplined risk management while carrying out portfolio construction.
With the focus on corporate governance and resulting in a 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 for asset managers and promises to transform the fund management process for the better.
The company says successful adoption of this new wave can be done through what is 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.
What are Quant Funds?
Quantitative strategy, an approach that is well entrenched in the west, is an alternate and 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.
The company claims that the Axis Quant 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 a diversified portfolio that has the potential to work across the market cycle.
Highlights of the fund;
· Its an open-ended equity scheme following a quantitative model
· 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 a fundamental factor-based approach to select the best ideas based on which it will construct and monitor the portfolio.
· Minimum application (NFO) of Rs 5,000 and in multiples of Re 1/- thereafter.
· Benchmark: S&P BSE 200 TRI
· NFO date: June 11, 2021, to June 25, 2021
Salient features of the fund;
· An equity scheme that invests in equity and equity-related instruments selected based on a quantitative approach.
· All seasons portfolio capturing the best of fundamental styles: Quality, Growth and Valuation.
· Stocks are evaluated using several fundamental parameters and weights are assigned using risk and other considerations.
· The portfolio is reviewed and rebalanced periodically.
Chandresh Nigam, MD and CEO, Axis AMC says, “The landscape of active equity investing has evolved and markets are becoming more efficient. While introducing new fund offers in the market, the constant aim has been to provide investors with a product basket that suits their needs and helps them diversify one’s portfolio, allowing them to make long term allocations. 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.”