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This Mutual Fund gave over 360% returns in just over 18 months. Should you invest?

What was once Escorts Mutual Fund became Quant Mutual Fund following a buyout of the asset management company by Quant Capital (MINT_PRINT)Premium
What was once Escorts Mutual Fund became Quant Mutual Fund following a buyout of the asset management company by Quant Capital (MINT_PRINT)

  • If an investor would have invested 1 lakh on Quant Small Cap fund on 23 March 2020, today his corpus would be 4,5L
  • Generally speaking, pure small cap schemes are suitable only if your goals are at least 10-12 years away

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Quant Small Cap fund has provided stupendous returns in the last 18 months driving high on the market rally. In this period, the fund gave over 360% returns becoming one of the biggest gainers in the category.  

Rated as a 4-star fund in the small cap category by both Morning Star and Value Research, Quant Small Cap fund's NAV was 29. 63 on 23 March 2020 and as of today, it stands at 135.97, as per the data available. 

That is, if an investor would have invest 1 lakh on Quant Small Cap fund on 23 March last year, then today his corpus would be 4,58,893. 

Quant Small Cap fund's NAV was  <span class='webrupee'>₹</span>29. 63 on 23 March 2020
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Quant Small Cap fund's NAV was 29. 63 on 23 March 2020
As of today, its NAV stands at  <span class='webrupee'>₹</span>135.97
View Full Image
As of today, its NAV stands at 135.97

Should you invest?

Arijit Sen, SEBI Registered Investment Adviser and co-founder of merrymind.in, said, Ratio analysis, being one way of reviewing this scheme, is encouraging, when compared with peers over a period of time. Factually, it has delivered favourable risk adjusted returns than category average. 

“We have to be mindful of the fact that standard deviation of the said scheme is on the higher side. Therefore, extremely risk-averse investors may look to avoid keeping small cap schemes in their portfolios," Sen cautioned. 

What strategy should you follow?

Generally speaking, pure small cap schemes are suitable only if your goals are at least 10-12 years away.

If you are considering small cap schemes for investment only because of recent glorious returns, you might be doing what should not be done. Achieving your financial goals is a serious aspiration. It can never happen by chance, said Sen.

Prudent investment decisions matter. While opting for small cap category of schemes or any other categories for that matter, you need to visualize your goal, comprehend your own risk profile, and logically understand the market scenario.

Before the steep rise since March 2020, the fund's NAV remained between 40- 50 range. Its biggest dip happened on 27 March 2020 when the NAV dropped to 29.63.

What was once Escorts Mutual Fund became Quant Mutual Fund following a buyout of the asset management company by Quant Capital, a broking and mutual fund distribution in 2018.

  

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