Quant funds remove human bias but may not outperform during bull run

If you are looking to invest in mutual funds which hold good quality stocks and minimises the risk of losses in falling markets, Quant Funds could be a good option

When a mutual fund (MF) investor puts money in a scheme, he is always betting on the fund manager’s stock-picking ability. But fund houses are beginning to experiment with schemes that work without a fund manager — quant funds. 

Driven by the use of artificial intelligence (AI) and Big Data, the first fund house to launch this scheme was Reliance MF over a decade back. But it is only last month that DSP MF launched its scheme, and now ICICI Prudential is also planning to launch a scheme in this category soon.

In these schemes, stocks are automatically selected through AI,