Aditya Birla Sun Life Mutual Fund on June 10, 2024, launched Aditya Birla Sun Life Quant Fund a thematic equity fund following Quant-based investment theme.
This theme uses a quantitative investing strategy, which blends the fund manager's insight with a proprietary quantitative model to select stocks based on factors like momentum factor, volatility etc.
The NFO runs from June 10 to June 24, 2024. The minimum application amount is Rs. 500 and in multiples of Re. 1 thereafter during the NFO period.
The exit Load of 0.50 per cent of applicable NAV is applicable if redemption or switch-out of units on or before 90 days from the date of allotment is done. After this period, no exit load is applicable.
Quant investing is an emotion-free investment approach which provides greater flexibility and repeatability while maintaining discipline by pre-defining the entry and exit points. Quantitative investment strategies use mathematical models and algorithms to identify investment opportunities.
The fund manager will identify the top 75 stocks from over 15 top mutual fund houses and then monitor the 5-year track record of such stocks. Then mathematical models such as momentum factor (consistency of last 6 month returns), sell-side revision composite and weightage for low volatility will be applied to arrive at a portfolio of 40 to 50 stocks.
A. Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC Ltd, said, “ The quant fund aims to leverage the combined strengths of human expertise and quantitative models to provide investors with a differentiated investment solution. The Aditya Birla Sun Life Quant Fund will deliver these benefits to investors through a rigorous, research-driven approach for an innovative investment process powered by tech and guided by wisdom.”
Harish Krishnan, Co-CIO and Head Equity, Aditya Birla Sun Life AMC Ltd., elaborated on the mechanism of stock picking. "The fund will start by narrowing the universe of stocks such that they fall in the large and midcap category. Then it will evaluate the quality of stocks based on their fundamental track record and look at the relative returns generated in the last 6 months of this universe," Krishnan said.
"Further it will monitor the composite score assigned by various sell-side analysts to arrive at a portfolio comprising of 40-50 stocks by first applying equal weight to all and then skew the weight of individual stocks basis low volatility,” Krishnan added.
