Aditya Birla Sun Life MF quant fund to tap best ideas of top mutual funds

Sets top 75 holdings of large fund houses as universe

Aditya Birla Sun Life (ABSL) Mutual Fund (MF) has launched its quant fund, which will look to invest in top ideas of larger fund houses after filtering on the basis of quality and momentum factors. The fund will have 75 stocks of the leading15 fund houses as its universe.

Quant funds use mathematical models and algorithms to identify investment opportunities but are open for fund managers’ intervention unlike index funds.

"We will start by narrowing the universe of stocks such that they fall in the large and midcap category. Next, we will evaluate the quality of stocks based on their fundamental track record. Post this, we will look at the relative returns generated in the last 6 months of this universe and then look at the composite score assigned by various sell-side analysts. Ultimately, we will arrive at a portfolio comprising 40-50 stocks by first applying equal weight to all and then skew the weight of individual stocks based on low volatility," explained Harish Krishnan, Co-CIO and Head Equity, ABSL AMC.