Introduction

The Quant Manufacturing Fund strategically invests in manufacturing companies to generate long-term capital appreciation. This open-ended equity scheme stands out for its focused thematic approach, robust performance, and a well-diversified portfolio spanning large-cap, mid-cap, and small-cap stocks. Managed by the reputable Quant Money Managers Limited, it offers low expense ratios, tax efficiency, and alignment with the Nifty India Manufacturing TRI benchmark.

After being launched on 5th August 2023, it has given 61.07% returns since its inception. This fund house is widely known for its analytical approach, meaning it gives importance to data as well as sentiments. They are more inclined to invest based on facts and practical knowledge while predicting future assumptions. Till now, this approach has worked greatly in their favour.

In this article, we explore seven compelling reasons to add the Quant Manufacturing Mutual Fund to your investment portfolio. Highlighting its appeal to seasoned investors, risk-takers, and those seeking long-term growth and diversification.

Identifying Quant’s unique investment approach

Their investing style is quite good they invest in quality companies that are market leaders in their field.

Investing in quality companies: The fund managers focus on investing in companies that are market leaders in their respective industries. These are typically well-established, financially stable, and operationally efficient companies.

Valuation-focused approach: Along with investing in quality companies, the fund also allocates a portion of its portfolio to stocks that are trading at low valuations compared to their intrinsic worth.

Emphasis on earnings growth: The fund managers believe that when the earnings trend of these low-valued stocks improves, they have the potential to generate very high returns for investors.

In simple terms, the investing style combines two main approaches:

·        Investing in high-quality, market-leading companies to provide stability and consistent returns.

·        Selectively investing in undervalued stocks with the potential for significant gains when their earnings and valuations improve.

This balanced approach aims to provide investors with a mix of stability and the opportunity for higher returns, by capitalizing on both the quality of the portfolio’s core holdings and the upside potential of the undervalued stocks. The goal is to generate favorable long-term returns by identifying companies with strong fundamentals and growth prospects, while also taking advantage of market inefficiencies in pricing certain stocks.

7 Reasons to Consider the Quant Manufacturing Fund for Your Portfolio

The Quant Manufacturing Fund, an open-ended equity scheme, focuses on investing in companies within the manufacturing sector. It aims to generate long-term capital appreciation by diversifying across various manufacturing segments. Here are seven compelling reasons to include this fund in your portfolio:

Consistent Performance

The Quant Manufacturing Fund has consistently delivered strong returns over the years. This consistent performance makes it an attractive option for investors aiming for long-term growth, showcasing its ability to handle market fluctuations and provide steady returns.

Thematic Approach

By adopting a thematic approach, the fund focuses on manufacturing companies, giving it a unique market edge. This focus allows the fund to identify undervalued opportunities within the sector, leading to potentially better returns for investors.

Diversified Portfolio

The fund maintains a well-diversified portfolio, including a mix of large-cap, mid-cap, and small-cap stocks. This diversification minimizes risk and ensures that the fund does not rely heavily on any single stock or sector.

Low Expense Ratio

With an expense ratio of 0.75%, the Quant Manufacturing Fund offers a cost-effective investment option. The low expense ratio indicates that management fees devour a lesser amount of returns, giving larger net returns for investors.

Tax Efficiency

The fund provides tax efficiency, with short-term capital gains taxed at 15% and long-term capital gains above ₹1 lakh taxed at 10%. This tax efficiency makes the fund appealing to investors looking to reduce their tax liabilities.

Strong Fund Manager

Managed by Quant Money Managers Limited, the fund benefits from the expertise of a reputable asset management company. The fund manager’s ability to identify undervalued opportunities and navigate market fluctuations enhances the fund’s attractiveness.

Benchmark Alignment

The fund is benchmarked against the Nifty India Manufacturing TRI, offering a clear framework for performance evaluation. This alignment ensures that the fund aims to deliver returns that are in line with the broader manufacturing sector.

 

Who should invest in Manufacturing Funds?

1. Seasoned Investors

·        These investors possess a deep understanding of specific sectors and industries, enabling them to make informed decisions.

·        Their knowledge helps them navigate the complexities of the manufacturing sector, identifying undervalued stocks and trends that less experienced investors might miss. They can handle the portfolio’s aggressiveness, adjusting their strategies based on market conditions.

2. Risk-Takers

·        Risk-takers are willing to accept higher volatility in their investments in pursuit of potentially higher returns.

·        Manufacturing funds, known for their cyclical nature, can offer substantial rewards during economic upswings. Risk-takers capitalize on these periods, understanding that the potential for higher returns justifies the increased risk.

3. Long-Term Oriented Investors

·        Investors with a medium to long-term investment horizon, typically at least five years.

·        Manufacturing funds are well-suited for long-term growth due to the sector’s potential for sustained expansion and innovation. These investors can weather short-term volatility and benefit from compounding returns over a longer period.

4. Diversification Seekers

·        Investors looking to diversify their portfolios to reduce risk. Adding a manufacturing fund introduces exposure to various industries such as automotive, electronics, and pharmaceuticals.

·        This diversification mitigates the risk associated with any single sector, providing a more balanced investment approach.

5. Growth-Oriented Investors

·        Investors who prioritize capital appreciation over income generation. Manufacturing funds are often geared towards growth, investing in companies with high growth potential.

·        These investors accept higher volatility in exchange for the opportunity to achieve significant capital gains.

6. Sector-Specific Knowledge

·        Investors with expertise in specific sectors within the manufacturing industry, such as automotive, aerospace, or pharmaceuticals.

·        These investors can leverage their sector knowledge to identify promising companies and trends, enhancing their investment decisions. Sector-specific funds allow them to focus on areas where they have a competitive edge in understanding market dynamics.

7. High Net-worth Individuals

·        Individuals with substantial investable assets looking for high-growth opportunities.

·        High-net-worth individuals can afford to allocate a portion of their portfolio to more aggressive growth funds, such as manufacturing funds, without jeopardizing their financial stability. Their larger capital base allows them to take advantage of high-growth investments while maintaining a diversified portfolio.

Final Statement

In conclusion, the Quant Manufacturing Fund offers a compelling blend of consistent performance. A focused thematic approach, a diversified portfolio, a low expense ratio, tax efficiency, strong fund management, and benchmark alignment. To add discipline and reduce the amount of risk invest with a SIP plan in this scheme. These features make it an attractive option for investors seeking long-term growth and stability in their portfolios