NFO Alert: Aditya Birla Sun Life Mutual Fund launches Aditya Birla Sun Life Quant Fund; all you need to know

Aditya Birla Sun Life Mutual Fund announced the launch of the Aditya Birla Sun Life Quant Fund. The scheme opened for public subscription on June 10, 2024, and will close on June 24, 2024.

Abeer Ray
First Published12 Jun 2024, 09:13 AM IST
Aditya Birla Sun Life Mutual Fund launches Aditya Birla Sun Life Quant Fund as a part of its new fund offers.
Aditya Birla Sun Life Mutual Fund launches Aditya Birla Sun Life Quant Fund as a part of its new fund offers.

Aditya Birla Sun Life Mutual Fund announced the launch of the Aditya Birla Sun Life Quant Fund, an open-ended equity thematic fund scheme following the quant-based investing scheme.

The scheme opened for public subscription on June 10, 2024, and will close on June 24, 2024. The scheme re-opens for continuous sale and repurchase within five days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme following the Quant-based investment theme.

Commenting on the new launch, A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC, said, “In today's complex markets, we believe quantitative investment strategies can offer valuable advantages such as improved transparency, emotion-free decision making, and robust risk management. 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.”

What is the main objective of investing in this fund?

The investment objective of the scheme is to generate long-term capital appreciation by investing in equity and equity-related securities based on the quant model theme.

Commenting on this unique fund offering, Harish Krishnan, Co-CIO and Head Equity, Aditya Birla Sun Life AMC, said, “This is the first such offering from our fund house, we will start by narrowing the universe of stocks such that they fall in the large and midcap category. Next, we will evaluate the quality of stocks based on their fundamental track record. Post this, we will look at the relative returns generated in the last six months of this universe and then look at the composite score assigned by various sell-side analysts. Ultimately, we will 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.”

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of 500 per plan/option and in multiples of Re 1 for purchase and Re 0.01 for switches. They can also invest through a systematic investment plan (SIP) of 500 (subject to a minimum of 10 SIP installments of 500 each) during the new fund offer (NFO) period. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Instruments

Indicative allocations (% of total assets)

Risk Profile

Minimum

Maximum

Equity & equity-related instruments# based on quant model theme

80%

100%

Very High

Equity & equity-related instruments# other than the quant model theme

0%

20%

Very High

Debt and money market securities

0%

20%

Low to Moderate

Units issued by REITs and InvITs

0%

10%

Very High

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such focused equity funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

Mutual Fund House

Name of the Fund

5-year returns (in %)

DSP Mutual Fund

DSP Quant Fund

16.08

ICICI Prudential Mutual Fund

ICICI Prudential Quant Fund

-

TATA Mutual Fund

Tata Quant Fund

-

Axis Mutual Fund

Axis Quant Fund

-

Nippon India Mutual Fund

Nippon Quant Fund

20.70

Quant Mutual Fund

Quant Quantamental Fund

-

Kotak Mahindra Mutual Fund

Kotak Quant Fund

-

Source: AMFI (As of June 11, 2024)

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked to the performance of Nifty 200 TRI. The NIFTY 200 Index is designed to reflect the behavior and performance of large and mid-market capitalization companies. NIFTY 200 includes all companies forming part of NIFTY 100 and NIFTY Full Midcap 100 index. This Index is suitable for the benchmarking of funds in the Quant theme.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as under:

  • For redemption/ switch-out of units on or before 90 days from the date of allotment: 0.50% of applicable NAV.
  • For redemption/ switch-out of units after 90 days from the date of allotment: Nil.

Who will manage this scheme?

Harish Krishnan will be the fund manager for equity investment of the scheme, 

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

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First Published:12 Jun 2024, 09:13 AM IST
HomeMutual FundsNFO Alert: Aditya Birla Sun Life Mutual Fund launches Aditya Birla Sun Life Quant Fund; all you need to know

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