Why Quant Mutual Funds not performing? | Quant Small Cap Fund | Quant Flexi Cap Fund | Quant Mid Cap

Summary

This video provides an analysis of the recent performance of various Quant Mutual Funds, highlighting their decline over the past few months and years. The speaker emphasizes that these funds, traditionally known for aggressive mid- and small-cap investments, are now shifting towards large-cap and defensive stocks. This change in strategy may be due to an increase in assets under management. While recent performance has been poor, investors are advised to monitor the funds' evolving strategies before making any decisions, as short-term results don't always reflect the long-term potential.

Takeaways

• 😀 Quant Mutual Funds have shown poor performance in the last 1, 3, and 6 months, with no improvement in returns.
• 😀 The Quant Midcap Fund has underperformed across different time periods, including 1 year and 2 years.
• 😀 The fund’s strategy has shifted from mid-cap and small-cap stocks to large-cap stocks to reduce risk and stabilize returns.
• 😀 Quant's overall performance decline is seen in multiple funds, including the Quant Equity Fund, which also shows weak returns in 1-year and 2-year periods.
• 😀 The Quant Equity Fund has been moving towards defensive stocks like Tata Power and Britannia, with 64% of its investments now in large-cap companies.
• 😀 The Quant ELSS Fund has also shown poor returns in 1-year and 2-year periods, with a growing focus on large-cap stocks (77% of investments).
• 😀 A shift towards defensive sectors like FMCG is noticeable in Quant ELSS Fund's investment strategy.
• 😀 Quant Small Cap Fund, similar to the other funds, is moving its investments away from small-cap stocks to large-cap stocks, reducing its exposure to higher-risk sectors.
• 😀 The growing asset size of Quant’s funds is leading to a strategic shift towards larger-cap stocks, as these are easier to manage with larger funds.
• 😀 Investors are advised not to judge these funds based solely on short-term performance (6 months or 1 year) and to focus on long-term trends and any changes in the core investment style.

Q & A

What was discussed in the video regarding the performance of Quant Mutual Funds over the past month?

The video highlighted the poor performance of Quant Mutual Funds, particularly in the last month. Even after analyzing the returns for the past 1, 3, and 6 months, the performance did not show significant improvement.

How did the Quant Mid Cap Fund perform over the past year?

The Quant Mid Cap Fund showed a decline in performance over the past year. It was also underperforming compared to its category average, with its rankings slipping in both 1-year and 2-year periods.

What are the reasons for the underperformance of Quant Mutual Funds?

The underperformance is attributed to a shift in investment strategy, where the funds have been increasingly allocating investments towards large-cap companies, and maintaining positions in stocks with low returns, like IRB Infra.

What change in investment strategy is being observed in Quant Funds?

Quant Funds have been shifting their focus from mid and small-cap stocks to large-cap stocks. This defensive strategy reflects a reduced risk appetite as the funds have grown significantly in size.

How has the investment approach of the Quant Large Cap Fund changed?

The Quant Large Cap Fund, which initially focused more on mid and small-cap stocks, has now increased its allocation to large-cap stocks, such as Tata Power and Britannia, as part of a more defensive investment approach.

What is the performance of the Quant Flexi Cap Fund over the recent periods?

The Quant Flexi Cap Fund has underperformed across all time periods, including 6 months, 1 year, and 2 years, with the fund now investing more in large-cap stocks as part of its strategic shift.

What impact has the shift to large-cap stocks had on the Quant Funds?

The shift to large-cap stocks has led to a decrease in risk but has also resulted in a decline in the returns. The funds are moving towards more defensive sectors like FMCG and large-cap companies, which may not offer high growth potential.

What specific stocks have the Quant funds been investing in recently?

The Quant funds have been investing in large-cap stocks like Tata Power, Britannia, ITC, Reliance, and Bajaj Finance, with a notable increase in their allocation to these defensive stocks over time.

Is it advisable for investors to exit Quant Mutual Funds based on the current performance?

Based on the recent performance over 6 months or a year, there is no immediate need for investors to exit. However, it’s important for investors to assess whether the change in investment style aligns with their long-term investment goals.

What is the main reason for the shift in the investment strategy of Quant Mutual Funds?

The main reason for the shift is the increase in assets under management (AUM). As the size of the funds grew, they began to allocate more capital to large-cap stocks to manage risks associated with large AUM and maintain returns.