Axis Quant Fund: Targets Quantitative Approach to Generate Alpha - Outside View by PersonalFN

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Axis Quant Fund: Targets Quantitative Approach to Generate Alpha
Jun 16, 2021

The mutual fund industry has grown with its product offerings from traditional large-cap, mid-cap, small-cap and flexi-cap funds to relatively evolved offerings such as the hybrid funds, ESG funds, international funds, etc. In the past two years, there has been an addition to this list with the quantitative funds.

Quantitative investing is a well-established approach globally with significant number of products and assets under management, however it is yet to gain the same traction in Indian markets. This strategy provides an alternative approach to traditional ways of investing.

The quant model theme in a fund uses a systematic approach towards portfolio management, thereby limiting behavioral biases and generating optimal returns. What really sets quant-based models apart is the way fund managers processes the quantitative data and make investment decisions.

Axis Mutual Fund is the new entrant in quant funds with the launch of Axis Quant Fund; it is an open-ended equity scheme following a quantitative model.

--- Advertisement ---
3 Hidden Forces are Converging for the First Time Ever...

This convergence is going to unleash a once-in-a-generation wealth boom.

A wealth boom that could potentially mint countless new dollar millionaires as the stocks at the heart of this event return thousands of percent over the long term.

It's a story of ground-breaking consequences that cannot be ignored.

Our co-head of research, Tanushree Banerjee, is going to reveal all about this historic event on the evening of September 24.

Tanushree believes, those who invest in the companies at the heart of this event could turn a small stake into generational wealth.

Just head to this page to get more details about this historic event...

On the launch of this fund, Mr Chandresh Nigam MD and CEO of Axis AMC said, "The landscape of active equity investing has evolved and markets are becoming more efficient. While introducing new fund offers in the market, our constant aim has been to provide investors with a product basket that suits their needs and helps them in diversifying their portfolio, allowing them to make long term allocations. The launch of Axis Quant Fund is our attempt to continue that journey for investors by offering them a product that can use the power of data to create long term wealth."

Table 1: Details of Axis Quant Fund

Type An open-ended equity scheme following a quantitative model. Category Thematic Fund
Investment Objective To generate long-term capital appreciation by investing primarily in equity and equity related instruments selected based on a quantitative model. However, there can be no assurance that the investment objective of the Scheme will be achieved.
Min. Investment Rs 5000/- and in multiples of Re 1 thereafter. Additional purchase Rs 100/- and in multiples of Re 1 thereafter. Face Value Rs 10/- per unit
SIP/STP/SWP Available
  • Direct
  • Regular
  • Growth
  • Income Distribution cum Capital Withdrawal Option
Entry Load Not Applicable Exit Load
  • If redeemed / switched-out within 12 months:- For 10% of investment: Nil
  • For remaining investment: 1% - If redeemed/switched out after 12 months from the date of allotment: Nil
Fund Manager - Mr Deepak Agarwal
- Mr Hitesh Das
Benchmark Index S&P BSE 200 TRI
Issue Opens: June 11, 2021 Issue Closes: June 25, 2021
(Source: Scheme Information Document)

What will the Investment Strategy of Axis Quant Fund be?

Axis Quant Fund will predominantly invest in equity and equity related instruments selected based on an in-house proprietary quantitative model to generate long-term capital appreciation.

The fund employs a fundamental data-driven bottom-up approach, a stock selection strategy that is backed with a systematic investment method. This strategy aims to identify quality stocks in combination with the tenets of growth and value investing. The stocks will be evaluated along multiple parameters and across different styles to arrive at a composite score and the portfolio will be reviewed and monitored on a pre-defined frequency.

The investment philosophy revolves around the Q-GARP: Identifying (Q)uality stocks which have good (G)rowth prospects but (A)t a (R)easonable (P)rice. While carrying out portfolio construction, this approach for selecting stocks is augmented with disciplined risk management.

The fund house is of the view that rules based mechanism will assist in less human bias stock selection process. It is a well-known fact that data is increasingly playing an important role in the fund management process. As data becomes available in a more structured manner, it will bring in efficiency and also lead to accelerated decision making.

--- Advertisement ---
SPECIAL REPORT REVEALS: Real Estate Success Secrets of India's Most Respected Traders...

• A Secret 33-Year-Old Pattern That Has Just Remerged to Practically Guarantee a Massive Bull Run in Real Estate Over the Coming Years!

• The #1 Trend You Need to Know Before Investing in Real Estate This Year (Even if You Deal with Traditional Real Estate Investing and Have Nothing to Do with Stocks, this is a MUST KNOW)

• INVESTING IN COMA: Why People Who Invested in Real Estate Before 2019 Didn't Make Any Money (and Why Now is The Right Time to Get Started)

Here's How to Grab a FREE COPY Today

Quantitative data can be used as an enhancement in the traditional fund management process or it can be used on a standalone basis to create alpha for investors.

This scheme apart from investing 80% of its assets in equity & equity related instruments of selected companies based on a quantitative model. It may also invest up to 20% of its assets in other equity related instruments, up to 20% in debt and money market instruments and up to 10% in units issued by REITs InvITs.

Under normal circumstances, the asset allocation will be as under:

Table 2: Asset Allocation of Axis Quant Fund

Instruments Indicative Allocations
(% of Net Assets)
Risk Profile
Minimum Maximum
Equity & Equity related instruments of selected companies based on a quantitative model# 80 100 High
Other Equity and Equity related instruments# 0 20 High
Debt & Money Market Instruments# 0 20 Low to Medium
Units issued by REITs & InvITs 0 10 Medium to High
#Derivatives - Investment in derivatives instruments shall be to the extent of 50% of the
Net Assets as permitted by Regulations / guidelines issued by SEBI from time to time.
(Source: Scheme Information Document)

Who will manage Axis Quant Fund?

Mr Deepak Agarwal and Mr Hitesh Das (for foreign securities) will be the dedicated fund managers for this scheme.

Mr Deepak Agarwal is Assistant Fund Manager - Equity at Axis Asset Management Company Ltd. and he has over 21 years of experience in financial services industry. Prior to this, he was working as Research Analyst - Equity at firms such as Axis Asset Management Company Ltd., Tata Asset Management Ltd., Axis Capital Ltd., Indiabulls Securities Ltd., Vmax Financial Services Ltd., BRICS Securities Ltd., and as Review Manager at Sureprep India Pvt. Ltd.

Mr Agarwal is a Chartered Accountant (C.A.) and B.Com graduate, and the scheme he manages are Axis Banking ETF (along with Viresh Joshi)

Mr Hitesh Das is Equity Research Analyst at Axis Asset Management Company Ltd. and has over 12 years of experience in financial services. Prior to this, he was associated as an Equity Research Analyst with firms such as Barclays Securities India Pvt. Ltd., Credit Suisse Securities (India) Pvt. Ltd., Ebusinessware (India) Pvt. Ltd., and as a Risk Analyst at Yes Bank.

His qualifications include, PGDM, M.Tech and B.Tech. Currently, the other schemes under his management are Axis Growth Opportunities Fund, Axis ESG Equity Fund, Axis Global Equity Alpha Fund of Fund, Axis Special Situations Fund, Axis Bluechip Fund, Axis Midcap Fund, Axis Flexicap Fund, Axis Focused 25 Fund.

REVEALED: Details of 3 "Super Smallcap" Stocks Nobody Tells You About...

Fund Outlook - Axis Quant Fund

Axis Quant Fund offers investors a unique proposition of a fundamentally driven quantitative approach. The fund will choose stocks based on core metrics such as growth, value, and quality, which will be screened using rule-based standards.

The quantitative investment model has an unbiased approach to portfolio management and it aims to outperform across various business cycles. This scheme provides a diversified portfolio across sectors and market capitalization; it will process complex data systematically and give objective insights to make quick informed decisions.

The quant model of this scheme will invest based on various fundamental factors such as, return on equity, sales growth, cash flow, debt to equity ratio, earnings growth, price to book, price to earnings, dividend yield, and earnings yield. Additionally, it has a few technical factors such as, liquidity, stock price momentum, volatility, and historical performance.

However being a thematic fund, one of the risks associated with this quant model theme is the time it may take for a quant model to adapt to new developments in market conditions and the economic dynamics. This could lead to delayed decision making towards the portfolio and may lack to provide you with the best possible returns.

This scheme is suitable for investors seeking capital appreciation over long term by investing in a quant based model. As this scheme will invest in direct equities which consist of high risk, you need to ensure suitability of your risk tolerance, long investment horizon, and determine if your investment objective is aligned to the fund's objective.

PS: If you wish to select worthy mutual fund schemes, I recommend that you subscribe to PersonalFN's unbiased premium research service, FundSelect.

Additionally as a bonus, you get access to PersonalFN's popular debt mutual fund service, DebtSelect.

PersonalFN recommendations go through our stringent process that assesses both quantitative and qualitative parameters, providing you with Buy, Hold, and Sell recommendations on equity and debt mutual fund schemes. Read here for details...

Author: Mitali Dhoke

This article first appeared on PersonalFN here.

Join Now: PersonalFN is now on Telegram. Join FREE Today to get 'Daily Wealth Letter' and Exclusive Updates on Mutual Funds

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.


The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Equitymaster requests your view! Post a comment on "Axis Quant Fund: Targets Quantitative Approach to Generate Alpha". Click here!


More Views on News

6 Stocks With High Financial Leverage (Views On News)

Aug 23, 2021

Interestingly, two Adani group companies top the list while a Tata group company also makes the cut.

Top 3 Agriculture Stocks to Keep Your Eye On (Views On News)

Jun 28, 2021

Top agriculture stocks that should have your attention now.

5 Popular Stocks with Zero Promoter Holdings (Views On News)

Jun 21, 2021

List of stocks that have zero promoter holdings, where FPIs hold stake.

5 Specialty Chemical Stocks that Turned Multibaggers in One Year (Views On News)

Sep 17, 2021

These specialty chemical stocks have surged 200% or more in the last year. Do you own any?

Axis Bluechip Fund: Aiming for Consistent Returns (Outside View)

Sep 17, 2021

PersonalFN's analysis on the features and performance of Axis Bluechip Fund.

More Views on News

Most Popular

Sansera Engineering IPO: Key Points to Consider (Views On News)

Sep 8, 2021

This IPO is a pure OFS and the company is looking to raise Rs 12.8 bn at the upper price band of Rs 744.

5 Stocks that Turned Rs 1 Lakh into Rs 1 Crore (Views On News)

Sep 7, 2021

Patience is one of the biggest virtues you need to have if you want to become a crorepati in the stock market.

The Top Stocks to Sell in this Bull Market (Profit Hunter)

Sep 8, 2021

When I saw the list of so-called 'value stocks' published by a leading brokerage, my worst fears came true.

5 Indian Companies that are Leading the AI Race (Views On News)

Sep 9, 2021

During the pandemic, India reported the highest increase in the use of AI at 45% compared to other major economies. AI has potential to add US$90 bn to the Indian economy by 2025.

Revenge Travel is Here. 9 Stocks Likely to Benefit (Views On News)

Sep 4, 2021

The term 'revenge travel' refers to the desire of going on a vacation after an extended period of lockdown.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2021
Get our special report Multibagger Stocks Guide (2021 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Sep 17, 2021 (Close)