Quant Small Cap Fund: A Smart Investment Strategy

The Quant Small Cap Fund is a mutual fund scheme from Quant Mutual Fund that aims to generate capital appreciation by investing in a well-diversified portfolio of small-cap companies. Launched on 1 January 2013, the fund has delivered average annual returns of 20.2% since its inception. As of 15 October 2024, the Net Asset Value (NAV) of the fund was 300.8034. The fund has an expense ratio of 0.64% and an exit load of 1% if redeemed within 1 year. The minimum Systematic Investment Plan (SIP) amount for this fund is ₹1,000, and there is no lock-in period. The fund has a very high risk rating and is suitable for investors who are seeking very high returns and are comfortable with the possibility of higher losses.

How to invest in Quant Small Cap Fund online

Investing in the Quant Small Cap Fund online is a straightforward process. Here is a step-by-step guide on how to do it:

Step 1: Understand the Fund

Before investing, it is essential to understand the nature of the Quant Small Cap Fund. This fund seeks to generate capital appreciation by investing in a well-diversified portfolio of small-cap companies. Small-cap companies are typically those outside the largest 250 stocks by market capitalization. The fund's objective is to provide higher returns over the long term, but it is important to note that these types of funds tend to be more volatile and experience more significant ups and downs.

Step 2: Evaluate Risk and Returns

The Quant Small Cap Fund is considered a "Very High Risk" investment according to SEBI's Riskometer. This means that while there is potential for high returns, there is also a significant possibility of losses. The fund has delivered annualized returns of around 20% since its inception. However, past performance does not guarantee future results.

Step 3: Determine Investment Amount and Type

The Quant Small Cap Fund offers both SIP (Systematic Investment Plan) and lump-sum investment options. The minimum SIP investment amount is ₹1,000, and there is no lock-in period for this fund. The minimum lumpsum investment is ₹5,000. It is important to note that there is an exit load of 1% if the investment is redeemed within one year.

Step 4: Visit the Fund House Website

To invest in the Quant Small Cap Fund online, you can visit the website of the fund house, Quant Mutual Fund. On their website, you will be able to find detailed information about the fund, including the current NAV (Net Asset Value) and the investment process. You will need to create an account and provide personal and financial information to proceed with the investment.

Step 5: Complete the Investment Process

Follow the instructions on the Quant Mutual Fund website to complete the investment process. You will likely need to provide bank account details and make the investment payment. After the investment is made, you will receive a confirmation, and your units in the fund will be allocated based on the NAV at the end of the day.

Step 6: Monitor Your Investment

After investing in the Quant Small Cap Fund, it is important to regularly monitor its performance. You can track the fund's NAV and returns on the fund house website or through other financial platforms. Remember that this type of investment is suitable for those who can remain invested for at least 3-4 years and are comfortable with the potential for higher losses.

Quant Small Cap Fund's investment objective

The Quant Small Cap Fund is a mutual fund scheme from Quant Mutual Fund that seeks to generate capital appreciation by investing in a well-diversified portfolio of small-cap companies. The fund has been in existence for over 11 years, launching on 1st January 2013.

Quant Small Cap Fund has delivered average annual returns of 20.2% since its inception and has doubled the money invested every 2 years. The fund has an expense ratio of 0.64%, which is close to what most other small-cap funds charge.

The fund's investment objective is to generate capital appreciation by investing primarily in small-cap companies. The fund has no lock-in period, and the minimum SIP amount is ₹1,000. The latest NAV or Net Asset Value (as of October 2024) is ₹297.3599.

The fund's performance has been consistent, and it has generated a 7.48% annual return in 70% of the times for investors holding for at least 5 years. The fund has an exit load of 1% if redeemed within 1 year.

Quant Small Cap Fund has a very high risk rating and is suitable for investors looking for high returns over a long period (at least 3-4 years) and are ready for the possibility of higher losses.

Quant Small Cap Fund's expense ratio

The expense ratio of a mutual fund is the annual fee (expressed as a percentage) charged by the fund house for managing your investment. The expense ratio of the Quant Small Cap Fund varies depending on the specific scheme.

The Quant Small Cap Fund (Regular Plan) has an expense ratio of 2.37%. This is higher than the expense ratio of the Quant Small Cap Fund Direct Plan, which is 0.62%. The Direct Plan is a more cost-effective option for investors as it has a lower expense ratio.

The Quant Small Cap Growth Direct Plan also has a lower expense ratio of 0.64%. This scheme has delivered strong returns over the last 1, 3, and 5 years, and since its inception.

Expense ratios are an important factor to consider when investing in mutual funds, as they can impact your overall returns. It is recommended to compare the expense ratios of different funds before making an investment decision.

Quant Small Cap Fund's historical returns

The Quant Small Cap Fund has delivered 17.41% returns since its inception about 10 years ago. Its trailing returns over different time periods are: 50.37% (1yr), 27.79% (3yr), 48.58% (5yr) and 13.58% (since launch). The expense ratio of the fund is 1.59% for the Regular plan and 0.62% for the Direct Plan. The fund has a Very High-risk rating.

Quant Small Cap Fund's portfolio

A Quant Small Cap Fund is an equity mutual fund scheme that aims to generate capital appreciation by investing in a well-diversified portfolio of small-cap companies. Small-cap stocks are equities with lower market capitalisations and are typically issued by companies with relatively limited sales and business operations.

When building a Quant Small Cap Funds portfolio, it is important to diversify across different sectors and industries. This helps to spread risk, mitigate market volatility and capitalise on growth opportunities. While small-cap allocations may drive substantial growth over the long term, they should be included alongside more stable instruments such as debt funds, blue-chip funds and large caps to optimise the portfolio's overall risk/return profile.

Some specific strategies for building a Quant Small Cap Funds portfolio include:

• Investing in evergreen sectors like healthcare, FMCG, engineering and pharmaceuticals, which remain relevant across market cycles.
• Focusing on emerging trends like electric vehicles, clean energy and AI, which offer potential long-term growth.
• Regularly investing small amounts in small-cap mutual fund schemes to achieve sector-level diversification.
• Checking the top10 holdings of the fund and ensuring minimal overlap between portfolio holdings to maintain balance.
• Monitoring the portfolio's performance against benchmarks and reviewing and rebalancing annually or when necessary.

It is recommended to hold small-cap stocks for at least 10 years and to allocate around 8% of the overall equity market to small-cap stocks.

Frequently asked questions