SBI Mutual Fund has launched SBI Quant Fund, an open-ended equity scheme that follows a quant-based investing theme.
The mutual fund scheme, which will be available for subscription from December 4-18, is aimed at generating long-term capital appreciation by investing in equity and equity-related instruments selected based on an in-house quant model. However, there can be no assurance that the investment objective of the scheme will be realised.
Benchmarked against BSE 200 TRI, the new fund will be managed by Sukanya Ghosh and Pradeep Kesavan.
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Nand Kishore, Managing Director & Chief Executive Officer, SBI Funds Management Limited, said, “As the largest fund house in the country we are committed to offering innovative investment solutions to our investors. The evolving landscape of factor-based investing presents significant opportunities for diversification and better risk-adjusted returns.”
What is multi-factor investing approach?
Multi-factor investing combines various factors rather than focusing on a single one, helping to smooth out the cyclicality of returns and reduce behavioural biases in factor selection.
“Our SBI Quant Fund, based on an in-house multi-factor model incorporating Momentum, Value, Quality, and Growth factors, provides a strategic opportunity for investors to diversify their portfolios with an aim to achieve superior risk-adjusted returns,” Kishore said.
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D P Singh, Deputy MD & Joint CEO, SBI Funds Management Limited, said, “The SBI Quant Fund is for those investors who believe in the India growth story and want to invest in equity with the benefit of periodic reviews through a rule-based investing framework. By integrating established equity factors, each with distinct risk/return profiles, the fund aims to deliver optimal risk-adjusted returns and minimise behavioural biases.”
SBI Quant Fund investing approach
“The new fund would predominantly invest a) 80-100% of its assets in equity and equity-related instruments selected based on a quantitative model, with the balance assets as per the following allocation: b) 0 – 20% in Equity and Equity-related instruments of companies other than above c) 0 – 20% in Debt and Debt-related instruments (including securitized debt {upto 20% of the debt portion of the scheme} &
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