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Wed, 10 Nov 2021 | Mint
IIFL Asset Management launches quant fund

IIFL Asset Management launches quant fund

IIFL Asset Management has launched an open-ended quant fund that will actively invest in equity and equity-related securities based on the quant theme. The new fund offer (NFO) opens on 8 November and closes on 22 November.

The fund will look to invest in quality stocks that show secular growth or defensive characteristics with a disciplined approach to portfolio construction.

A quant fund proposes to select stocks based on pre-determined rules and eliminate fund manager bias in the stock selection process.

The IIFL Quant Fund will have periodic rebalancing and review. The fund will be managed by Parijat Garg, fund manager, IIFL AMC.

“Based on a quantitative model, the strategies of the IIFL Quant Fund are fully systematic and rule-based and would have additional filters for selecting quality momentum stocks. The fund universe will include the top 200 stocks by market cap and liquidity," said Garg.

As per the fund house, quality stocks will be screened based on quantitative portfolio construction methods and techniques. IIFL Quant Fund aims to provide investors with an opportunity to take exposure across multiple sectors.

As this fund is based on quantitative rules, it is mainly driven by investment process over discretion, thereby avoiding market cap and behavioral biases. Further, the methodology and portfolio construction of the fund are back-tested across time periods and validated. The benchmark for this fund will be S&P BSE 200 total return index (TRI).

Commenting on the launch, Manoj Shenoy, chief executive officer, IIFL AMC, said, “The passive+ approach that the fund follows is based on multiple quantitative factors that have been back-tested and historically proven to improve stock selection capabilities. The model has a fundamental basis with parameters clearly laid out and relies on a defined process while applying the same across a set of comparable stocks."

The minimum investment required during the NFO period is ₹1,000 and in multiples of ₹100, thereafter. There will be an exit load of 1% if units are redeemed within 12 months of allocation.