[saket77]

Originally Posted by DigitalOne

ps - I am amused by how they refer to themselves with a small-case 'q' as in 'quant' and not 'Quant'.

and a capital 'M'- quant Mutual; which seems to be intentional & the way they want it to be.

Also they sent 2 mails to investors yesterday night. In the previous one, they mentioned their AuM to be Rs. 93000/- only. In the next email, they corrected it to Rs. 93000 crore. May be a result of working overtime from home on a Sunday

[Fx14]

Originally Posted by saket77

and a capital 'M'- quant Mutual; which seems to be intentional & the way they want it to be.

That's probably to differentiate themselves from the similar in appearance "Quantum" Mutual Fund, which was already in existence.

The other fall out would be, Quantum MF issuing clarifications that this episode does not pertain to them but another MF.

[PearlJam]

Originally Posted by SmartCat

The fall will only be in smallcaps held by Quant MF in large quantities, not in the entire index. That's because of poor liquidity. Sales worth Rs. 20cr or Rs. 50cr can significantly affect share prices of smallcaps.

Theoretically you're right - since the NAV is a function of the underlying assets.

So I'm really wondering why the Quant Midcap Fund (fallen 0.93%), and more importantly, Quant Active Fund (fallen 0.68%), have also been affected, as the general Indian indices actually ended positive yesterday. The latter fund, especially, holds stocks that are relatively solid, and with a lot of liquidity. Did those underlying stocks, of which Quant holds a very small percentage, get affected?

[SmartCat]

Originally Posted by PearlJam

So I'm really wondering why the Quant Midcap Fund (fallen 0.93%), and more importantly, Quant Active Fund (fallen 0.68%), have also been affected, as the general Indian indices actually ended positive yesterday.

The displayed MF portfolio on valueresearchonline is only part of the portfolio. These funds might have exposure to a few low liquidity smallcaps too. Logically, the fund manager to sell largecaps to take care of news based redemptions like this. But they generally want to keep stocks at the desired percentages.

Anyway, this seems to be a smallish drop. It might continue for a couple of days more, but unlikely it will have any long term impact on either performance of the funds or its ability to attact new investors. Most investors don't scan the news like we do

[DigitalOne]

Originally Posted by DigitalOne

But again, quant MF tends to have very focussed portfolio, so the damage may be limited to these particular stocks as you rightly say.

Originally Posted by PearlJam

...and more importantly, Quant Active Fund (fallen 0.68%), have also been affected, as the general Indian indices actually ended positive yesterday. The latter fund, especially, holds stocks that are relatively solid, and with a lot of liquidity.

Quant MF, including the Active fund, holds some stocks which are not held by any other AMC or fund. I just checked one of the stocks mentioned - Century Enka. This stock did drop yesterday because of this news. Of course, just this particular dip doesn't fully explain the NAV drop of 0.68%.

Going forward, investors should be wary of this AMC and not make it part of their core portfolio. Something doesn't smell right. I recently started investments in Quant Momentum fund and Absolute fund (HY-Agg). As of now, Quant funds make ~1% of my portfolio and I would keep it such.

[DaptChatterjee]

Originally Posted by PearlJam

So I'm really wondering why the Quant Midcap Fund (fallen 0.93%), and more importantly, Quant Active Fund (fallen 0.68%), have also been affected, as the general Indian indices actually ended positive yesterday. The latter fund, especially, holds stocks that are relatively solid, and with a lot of liquidity. Did those underlying stocks, of which Quant holds a very small percentage, get affected?

Quant releases their month end portfolio very early in the next month, in 2/3 working days. Lots of retail investor/traders were copying & buying these mid/smallcap stocks (thanks to all the finfluencers teaching Mohnish Pabrai style copycat portfolio). My guess is that these people panicked and sold their investments.

As always Prof. Pattabiraman of freefincal provides us the correct approach on how to react.

[JediKnight]

Originally Posted by DigitalOne

Going forward, investors should be wary of this AMC and not make it part of their core portfolio. Something doesn't smell right. I recently started investments in Quant Momentum fund and Absolute fund (HY-Agg). As of now, Quant funds make ~1% of my portfolio and I would keep it such.

Whenever I see an AMC with extraordinary returns when compared to peers I get jittery. Especially if the AMC is relatively new or is a foreign company. Having burnt fingers once with Franklin Templeton. I was eyeing Quant funds for sometime due to their exceptional returns but could never muster courage to invest with them.

[vinit.merchant]

Originally Posted by JediKnight

Whenever I see an AMC with extraordinary returns when compared to peers I get jittery. Especially if the AMC is relatively new or is a foreign company.

quant is not a new player in any manner whatsoever.
Its funds are top performers since a long time.

4 out of 5 top 10 year SIP returns have been delivered by quant funds.

[Route66]

I am considering increasing my investment in Mutual Funds for long term (20-25 Years). Need some pointers from the experienced folks here.

I currently have SIPs in the following funds from some time (3+ Years):

1. DSP Small Cap Fund
2. Mirae Asset Large & Mid Cap Fund
3. PGIM India Global Equities Opportunity Fund
4. Quant Flexi Cap Fund
5. Quant Focused Fund

Can the gurus here please suggest some additional Mutual Funds/ETFs I should invest in. I am not looking for Debt funds as that is already covered in my investment bucket.

Should i be looking more towards ETFs? If yes, which ones would you suggest and what is the best way to invest in ETFs - Demat account or direct from a fund house?

Thanks in advance

[Naetik30]

Originally Posted by Route66

I am considering increasing my investment in Mutual Funds for long term (20-25 Years). Need some pointers from the experienced folks here.

I currently have SIPs in the following funds from some time (3+ Years):

1. DSP Small Cap Fund
2. Mirae Asset Large & Mid Cap Fund
3. PGIM India Global Equities Opportunity Fund
4. Quant Flexi Cap Fund
5. Quant Focused Fund

Can the gurus here please suggest some additional Mutual Funds/ETFs I should invest in. I am not looking for Debt funds as that is already covered in my investment bucket.

Should i be looking more towards ETFs? If yes, which ones would you suggest and what is the best way to invest in ETFs - Demat account or direct from a fund house?

Thanks in advance

About your fund allocation, you should plan a ratio on how much you want to invest in large:mid:small cap based on your risk profile and goals. Mine for example is 65:25:10. And a small cap fund will also have significant mid and large, so you should create an excel with the funds actual portfolio and then decide. Do not think 100% in a small cap fund means all your investments are in small cap. It would be something like 60% in small cap stocks.

I wouldnt yet suggest ETFs for investments in India. This still very illiquid and the election results day showed the tracking error issues, when the ETFs did not fall in line with indices. For now stick to MFs.

And about ETF investments - how do you invest without a demat account? Fund houses cant help you with ETF.

[Naetik30]

Experts - I have a significant investment in UTI Flexi Cap Fund. This was an SIP I ran since 2014. But stopped due to fund performance issues in May 2023.

I want to move the funds over to my other funds. What should be the best solution for this.

Option A: Sell in tranches over the next few years to make use of the 1 lakh exemption in LTCG. But this would take about 10 years, at current valuations. And the fund and my investment in this suffers for those many years.

Option B: Just sell everything immediately and take the tax hit and reinvest. Hoping the reinvestment fund returns take care of it.

The only time I have done this in the past was in 2023, when I sold all my investments in Axis Focused 25 mutual fund. But I was able to come out with little damage mainly due to the lower amount invested.

Has anyone done anything similar? Your guidance will be valuable.

[sunilch]

Originally Posted by Naetik30

Experts - I have a significant investment in UTI Flexi Cap Fund. This was an SIP I ran since 2014. But stopped due to fund performance issues in May 2023.

I want to move the funds over to my other funds. What should be the best solution for this.

Option A: Sell in tranches over the next few years to make use of the 1 lakh exemption in LTCG. But this would take about 10 years, at current valuations. And the fund and my investment in this suffers for those many years.

Option B: Just sell everything immediately and take the tax hit and reinvest. Hoping the reinvestment fund returns take care of it.

The only time I have done this in the past was in 2023, when I sold all my investments in Axis Focused 25 mutual fund. But I was able to come out with little damage mainly due to the lower amount invested.

Has anyone done anything similar? Your guidance will be valuable.

I did something similar in my past (Option B) and took a hit on my total portfolio value due to taxation. This was done as I was more comfortable with option B than Option A personally.


But for you, if 10 years is too long a period, you can try do mix both A and B. Do this over next 3-5 years. Some LTCG benefit and some tax to be paid. That way you may mitigate some risk.

[siddhant]

Originally Posted by Naetik30

Experts - I have a significant investment in UTI Flexi Cap Fund. This was an SIP I ran since 2014. But stopped due to fund performance issues in May 2023.

I want to move the funds over to my other funds. What should be the best solution for this.

Option A: Sell in tranches over the next few years to make use of the 1 lakh exemption in LTCG. But this would take about 10 years, at current valuations. And the fund and my investment in this suffers for those many years.

Option B: Just sell everything immediately and take the tax hit and reinvest. Hoping the reinvestment fund returns take care of it.

The only time I have done this in the past was in 2023, when I sold all my investments in Axis Focused 25 mutual fund. But I was able to come out with little damage mainly due to the lower amount invested.

Has anyone done anything similar? Your guidance will be valuable.

When amounts are large, even an alpha of 2-3% with a better fund eats the LTCG taxation for breakfast. If you are expecting an alpha of 5% or more with the newer fund, I'd suggest option B. I did something similar recently although I avoided exit load and STCG.

[DigitalOne]

Originally Posted by Route66

I am considering increasing my investment in Mutual Funds for long term (20-25 Years). Need some pointers from the experienced folks here.

About ETFs, Naetik30 has already replied. For long term, go for index funds rather than active managed fund. The fact is active funds are struggling to beat the indices.

Summary from a Freefincal article of March 2024:

• “Beating” the market is not easy!
  
• Only 45% to 55% of funds consistently beat the index in most categories. Selecting those funds is no guarantee of future outperformance.
  
• Investors are better off with passive funds: no fund manager risk, less fee, no performance anxiety, and time spent elsewhere. Ideally, a Nifty or Sensex index fund is enough.

Avoid fresh investments into Quant AMC till the SEBI 'enquiry' concludes.

Originally Posted by Naetik30

Experts - I have a significant investment in UTI Flexi Cap Fund. This was an SIP I ran since 2014. But stopped due to fund performance issues in May 2023.

Recent performance (1 month & 3 month) may indicate a turnaround. If there is significant LTCG impact, I suggest you wait till March to take a decision. If you are feeling the urge to switch now, keep it below 1 Lakh LTCG and then review the decision in March.

[DigitalOne]

Originally Posted by saket77

Current MF commissions are mostly in range of 0.6%-0.85% for good equity schemes. These may be slightly higher for non-performing/ lesser known schemes or probably NFOs.

I did some analysis of the difference in expenses between Direct and Regular funds in the Flexicap category.
I downloaded the data into 2 Excel files (Regular and Direct), removed the ETFs, Index funds, and FoFs from the files so that I am left with only actively managed funds (74 funds).

Summary of the findings:

Average expense ratio among 74 funds: Direct - 0.78%; Regular - 2.00%

Highest expense ratio: Taurus Flexi Cap Fund (2.64 and 2.57)

So, going via a distributor (regular plan) is going to cost you 1-1.2% more. For a portfolio of, say 50L, that's an additional recurring cost of ~50,000 per year.