SBI Mutual Fund introduces SBI Quant Fund: A data-driven path to wealth creation
SBI Quant Fund offers rule-based equity investing with momentum, value, quality and growth.
SBI Mutual Fund, India's largest asset management company, has launched the SBI Quant Fund, an open-ended equity scheme that leverages a quant-based investment approach. Designed to provide long-term capital appreciation, the fund employs an in-house multi-factor quant model focusing on Momentum, Value, Quality, and Growth factors for stock selection.
The New Fund Offer (NFO) is open for subscription from December 4, 2024, to December 18, 2024. The fund aims to help investors diversify their portfolios and achieve optimal risk-adjusted returns through a disciplined, objective, and rule-based framework, free from emotional biases.
Features of the SBI Quant Fund
- Multi-Factor Investment Strategy
- Combines Momentum, Value, Quality, and Growth factors to create a balanced portfolio that adapts to different market cycles.
- Helps smooth out cyclicality and reduce behavioural biases in stock selection.
- Data-Driven Approach
- Uses SBI Mutual Fund's proprietary quant model for portfolio construction.
- Provides a systematic, rules-based framework for periodic reviews and rebalancing.
- Asset Allocation
- 80-100 per cent: Equity and equity-related instruments selected using the quant model.
- Up to 20 per cent: Debt and debt-related instruments, money market instruments, and equity of other companies.
- Up to 10 per cent: Units issued by REITs and InvITs.
- Up to 35 per cent: Investments in foreign securities, including ADRs/GDRs and overseas ETFs.
Key Highlights of SBI Quant Fund
- Diversification: Enables investors to diversify across multiple factors and asset classes, offering a balanced risk-return profile.
- Flexibility: Invests in equities across Large-Cap, Mid-Cap, and Small-Cap stocks.
- Global Exposure: Includes overseas securities to capture global growth opportunities.
- Benchmark: The fund’s performance will be measured against the BSE 200 TRI.
Management Comments
Nand Kishore, MD & CEO, SBI Funds Management Ltd, highlighted the fund's unique approach: "Multi-factor investing allows investors to benefit from a balanced strategy by combining various factors. The SBI Quant Fund is designed to deliver superior risk-adjusted returns while reducing biases that may arise from emotional decision-making."
D P Singh, Deputy MD & Joint CEO, SBI Funds Management Ltd, added: "This fund is ideal for investors who trust the India growth story and seek a disciplined equity investment approach. By integrating Momentum, Value, Quality, and Growth factors, the SBI Quant Fund offers a robust framework to navigate different market cycles."
Should you invest?
The SBI Quant Fund presents a compelling option for investors looking to harness the power of quantitative models to build a diversified and balanced equity portfolio.
Here’s why you might consider it:
- Objective and Data-Driven: The rules-based investing framework minimizes emotional decision-making, offering consistency in stock selection.
- Broad Diversification: The multi-factor approach reduces the risk associated with reliance on a single factor.
- Ideal for Long-Term Investors: The fund aligns with investors aiming for steady, long-term capital growth through a disciplined strategy.
- Global Opportunities: Exposure to foreign securities adds another layer of diversification and growth potential.
Considerations: As with all equity investments, this fund carries inherent market risks. Investors should evaluate their financial goals, investment horizon, and risk appetite before investing.
How to invest?
The NFO is open from December 4, 2024, to December 18, 2024, with a minimum investment amount of Rs 5,000 and multiples of Re 1 thereafter. Investors can apply through SBI Mutual Fund’s website or other authorized platforms.
Disclaimer: The article is for informational purposes only and not investment advice.