Quant Value Fund discloses its first portfolio: not for faint hearted people!

Quant Value Fund
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If you want to walk fast, walk alone but if you want to walk far, walk together—a Whatsapp forward reads. Although this principle sounds logical otherwise, it may not hold much ground in the world of investments.

A crowded trade rarely takes you far, although momentum can generate quick results.

If you can walk down a less-travelled or completely uncharted road, rewards can be rich. But costs, in the form of potential losses, could be high too in that case. This forms the basis of contra and value investing.

In mid-November last year, we talked about a New Fund Offer (NFO)—Quant Value Fund. Recently, it has disclosed its first portfolio, as on December 31, 2021. Let’s see what it looks like.

Quant Value Fund had an AUM (Assets Under Management) of Rs 281.93 crore on December 31, 2021.

The fund held just 26 stocks and remained largely invested with equity assets accounting for 98% of the portfolio.

No IT and no private sector banks…

A consensus is building amongst experts that financials are likely to make a strong comeback in 2022, led by private sector lenders. Quant Value Fund seems unimpressed with this view and appears to be walking the talk.

Quant Value Fund has an 8.7% exposure to banks but you will find only two public sector banking names in its portfolio—State Bank of India (6.78%) and Bank of Baroda (1.92%). The fund has rather preferred to bet on the theme of capital market infrastructure and non-lending financial services companies such as MCX (5.21%) and ICICI Lombard General Insurance (4.12%).

PortfolioThe same holds true for tech stocks.

In October 2021, we had interviewed Sandeep Tandon, Director and CEO of Quant Mutual Fund. Our interpretation of his views was that the valuations in IT were peaking out then. The fund house sounded unexcited about the stock market prospects of the popular theme of technology.  

Following a high conviction approach

Quant Value Fund has been showing immense faith in its high conviction calls. For instance, consumer non-durable features in the top-5 sectors of the fund but there’s just one consumer non-durable company (ITC) in the portfolio.

Quant Value Fund

Quant Value Fund has invested 5.78% of its assets in ferrous metals—Tata Steel (4.34%) and Rama Steel Tubes (1.44%). This comes at a time when many experts have been sounding cautious about the ferrous metal space and predicting a weak demand for steel in 2022.

But what can really raise many eyebrows is Quant Value Fund’s bet on the Media & Entertainment sector. The performance of media stocks vis-à-vis broader markets has improved considerably over the last one year. However, many of them still quote much below their 2017 highs. 

Mutual Funds

With four of its holdings—Network18 Media & Investments (5.34%), TV Today Network (5.24%), Zee Entertainment (3.94%) and Sun TV Network (1.99%)—Quant Value Fund covers a large spectrum of the media sector. Here too, it has refrained from investing in popular names such as PVR, Inox Leisure, Saregama and Nazara Tech, amongst others.

The fund has a portfolio beta of 1.18. In theory, a portfolio beta of greater than 1 indicates that the fund is more volatile than its benchmark. This number isn’t static though. 

In a nutshell

While it’s too early to talk about the performance of the fund, it looks like Quant Value Fund isn’t for faint hearted people.

Do you think Quant Value Fund will prove its mettle over time, just like many other offerings from Quant’s stable have done in the last 2 years? Do share your feedback in the comments section.

You may also like to read: Will midcap cement stocks shine post Budget 2022?

Disclaimer

The blog is for information purposes only and anything mentioned herein shouldn’t be construed as a reason to buy/hold/sell any stock or a mutual fund. Furthermore, the information provided in the blog and observations made therefrom shouldn’t be treated as the extension of recommendations made on the other properties of Ventura Securities. If you follow any research recommendations made by our fundamental or technical experts, you should also read associated risk factors and disclaimers.

Mutual Funds are subject to market risks and you should pay close attention to risk factors before investing. We strongly suggest you to consult your financial advisor before taking any decision pertaining to your finances. Asset allocation becomes extremely relevant.

We, Ventura Securities Ltd, (SEBI Registration Number INH000001634) its Analysts & Associates with regard to blog article hereby solemnly declare & disclose that:

We do not have any financial interest of any nature in the company. We do not individually or collectively hold 1% or more of the securities of the company. We do not have any other material conflict of interest in the company. We do not act as a market maker in securities of the company. We do not have any directorships or other material relationships with the company. We do not have any personal interests in the securities of the company. We do not have any past significant relationships with the company such as Investment Banking or other advisory assignments or intermediary relationships. We are not responsible for the risk associated with the investment/disinvestment decision made on the basis of this blog article.

 

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