Quant Manufacturing Fund: Comprehensive Review and Analysis 2024

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The Quant Manufacturing Fund is a new fund that started in August 2023, despite being a newcomer in the industry, it comes from a well-established asset management company Quant Mutual Fund thathas quickly become the top performer in its category, delivering an impressive 58% return since its launch. With an AUM of Rs 682 crore, the fund primarily invests in trending Indian manufacturing stocks and sectors, buying and selling at the right times for high returns. Its active management and strategic portfolio allocation make it ideal for investors seeking high returns without the effort of timing the market themselves.

To get a better idea of the fund's performance, let's analyze its current portfolio. This will help us determine whether this fund is worth investing in and if it has the potential to help you reach your desired financial goals.

Recent Performance Versus Peers

Quant Manufacturing Fund has delivered a remarkable return of 37.6% over the past six months, significantly outpacing the NIFTY 500 TRI benchmark, which provided 23% over the same period. This highlights the fund's superior performance.

Since its launch, the fund has consistently been the top performer in the manufacturing category. This success is achieved through effective management and active strategic portfolio management and has led to its consistently outperforming its competitors, regardless of market conditions.

Will the Quant Manufacturing Fund Keep up with the Market, or Does it Struggle for Consistency? 

Let us start by understanding its investing strategy to find our answers:

Investing Strategy

This fund takes a unique approach to making money by actively investing in trending stocks, entering at the right time and exiting when the time is right. This strategy requires a lot of resources and expertise. They use quantitative data and predictive analysis to identify trending sectors and stocks, entering at inflection points—when a stock moves from a neglected area to an attractive one—capturing liquidity when buying is high. This is why their funds generate such high returns.

Fund Manager of Quant Manufacturing Fund

The fund we're discussing is in good hands under the leadership of Mr. Sandeep Tandon, an experienced professional with over 25 years of experience in fund management and equity analysis. He has deep expertise in financial services and derivatives. Sandeep has played a crucial role in the success of Quant Manufacturing Funds, which has consistently outperformed its peers and benchmarks in the past year. His leadership makes him a seasoned leader in the investment management industry.                                   

Sandeep Tandon
CIO (Equity)
Quant MF

Let’s look at how this fund has divided its portfolio:

Portfolio Allocation

Portfolio allocation means selecting how to divide your money among several types of investments, such as stocks, bonds, and cash. This allocation allows you to reduce risk.

The fund's allocation is divided across three types or sizes of companies: large-cap, mid-cap, and small-cap. Here is the fund's allocation

This fund has allocated its equity investments as, 63% in large-cap, 19.3% in mid-cap and 18% in small-cap stocks.

In simple terms, 

The fund has currently invested most of its money in large companies, which are more established and has kept minimum allocation in mid and small cap companies. This is a wise decision as smaller company's stocks carry high risk. With the current allocations, this fund can perform well in the market.

Learn : why you should include a Manufacturing Fund in your portfolio?

Market Cap & Sector Allocation

Mutual Funds diversify across sectors to manage risk and capitalize on growth opportunities. This diversification limits the impact of any single sector's performance and aims to deliver more stable returns.

The top sectors of the Quant Manufacturing Fund show the fund's goal of focusing on promising industries with the potential for high returns. Remarkably, Energy & Utilities and Materials outperformed over this period, which is consistent with this fund's investment philosophy.

Let’s make things more clear with the help of the below graph:

The fund is mainly invested in companies that work in Energy & Utilities, Materials and consumer goods. These are crucial areas of the market. Although the last two sectors have not performed well, with the exception of consumer goods they are expected to improve, particularly in the long term.     

Therefore, the fund's investment strategy is cautious, yet forward-looking, anticipating good outcomes in the future

Stock Selection & Quality                          

Now comes the stock selection process, in which a fund's portfolio holdings refer to the specific stocks that the Mutual Fund has invested in; they reflect the specific Equity and debt, or other assets that the fund owns, and are selected based on the fund's investment objectives, strategy, and market analysis.

While analyzing stock selections of the fund, we look at four important things to make sure they're good quality: how fast their sales are growing, how much profit they make, how much cash they have coming in, and how their price compares to their earnings (that's the PE ratio).

This fund is invested in companies that are growing fast. On average, their sales are going up by 9%, they're making a 20% profit on what they sell axis have expertise in finding High ROE and Earnings Growth companies, their cash flow is increasing by 20%, and they have a low PE ratio of 22 this indicates that they are acquiring growth companies at higher valuations. All this adds up to why we think this fund is one of the best choices, with really top-notch companies in it.

Endnote

If you are here to make high returns with this growing thematic category, start with an early SIP to make the most of it. With a simple investment, you can grab your chance to capitalize on this once-in-a-lifetime opportunity and secure your future.

Read the detailed review of the oldest scheme in this category, Is ICICI Prudential Manufacturing Fund a Good Investment?