Quant Active Fund Review

Published: June 20, 2021 at 9:35 am

Last Updated on December 29, 2021 at 6:17 pm

In this article, we review Quant Active Fund, which seems to have caught the attention of young DIY investors.  Why has it caught the attention of investors? Returns! It is always returns! And in particular the last one year return, without any regard to the fund’s history. Quant Active Fund has delivered 96.1% returns in the last year (trailing, at the time of writing).

Our first step will be to trace the history of the fund. This is a lot more fun than analysing returns, although often frustrating due to difficulty getting data. Quant Active Fund has an inception date of April 2001. Since “Quant” is a relatively new name in the mutual fund space, this means they have acquired an AMC.

Quant Capital acquired Escorts Mutual Funds in late 2017, and the change became official in early 2018. After this, Escorts Growth Fund became Quant Growth Fund. Then, with effect from Oct 2018, Quant Growth Fund became Quant Active Fund.

Quant Growth fund was a fully invested (80%-100%) growth equity scheme benchmarked to the Nifty. This changed to Quant Active Fund, a multi-cap fund that can freely invest across market cap benchmarked to the Nifty 500.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

Then SEBI changed the asset allocation of multicap funds and then was forced to introduce a new category called flexi-cap to correct this mistake. So from 1st Jan 2021 conformed with the new multicap cap rules. It is now benchmarked to the Nifty500 Multicap 50:25:25 Index. It can now invest 25% to 50% of its assets in large cap, 25-50% in mid cap and 25-50% in small cap stocks separately (min 25% in each cap).

You can see why those with an incurable shiny object syndrome are excited about this fund.Quant Active Fund vs Nifty 500 TRI and Nifty 500 Multicap 50-25-25 TRI since Jan 2019

Quant Active Fund vs Nifty 500 TRI and Nifty 500 Multicap 50-25-25 TRI since Jan 2019The reason for this outperformance is possibly due to an increase in small cap exposure after the March 2020 exposure.

Quant Active Fund Market Cap Allocation History
Quant Active Fund Market Cap Allocation History

Given this, it is surprising why the fund did not orient itself as a flexi-cap fund with the full freedom to change the market cap. Instead, it chose to be a multicap fund with min 25% exposure to all three capitalization segments. In any case, interested readers must appreciate that the fund has barely any history to analyse returns or risk.

The fund has not made any asset allocation calls (increase in bond holdings) in the last couple of years (it can hold up to 35% in bonds).

Asset allocation history of Quant Active Fund
Asset allocation history of Quant Active Fund

The fund had an atrociously high expense ratio for the direct plan until July of last year, when the AUM was just 16 Crores.

Expense Ratio history of Quant Active Fund
Expense Ratio history of Quant Active Fund

After that, the AUM has increased by leaps and bounds. According to AMFI, as of Jan-March 2021 quarter, about 41% of the fund’s AUM is in the direct plan. Before the expense ratio drop in direct plans and possibly a rejuvenated marketing campaign among distributors, the direct plan AUM share was only 24% in April-June 2020 quarter.

The regular plan AUM increased by about 16 times from April-June 2020 to Jan-March 2021 quarters (1506% increase), while the direct plan AUm increased by 35.5 times (3448% increase).

Much of this AUM increase is due to inflows and not returns, as seen from the spike in the red line below. This is the change in AUM minus the change in NAV. Notice that the red line was hovering about zero up to June 2020.

NAV AUM and Change in AUM minus change in NAV of Quant Active Fund
NAV AUM and Change in AUM minus change in NAV of Quant Active Fund

In summary, Quant Active Fund does not have any investor history to analyze past performance. Much of its AUM has come in the last few months, inspired by recent past performance – what we would like to call immature AUM. We strongly urge investors to avoid Quant Active Fund. We must not get carried away by last year’s returns and dig deeper into the fund’s past.

Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.

  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter with the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

Explore the site! Search among our 2000+ articles for information and insight!

About The Author

Pattabiraman editor freefincalDr. M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter, Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision-making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it and teach him several key ideas of decision-making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & it's content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)