According to the press release, the fund aims to invest in stocks that show growth or defensive characteristics. IIFL Quant Fund will undergo periodic rebalancing and review. The investment objective of the fund is to generate long-term capital appreciation for investors from a quant themed portfolio of equity and equity related securities. Quality stocks will be scrutinized based on quantitative portfolio construction methods and techniques.
The fund house also states that since the fund is based on quantitative rules, it is primarily driven by a discretionary investment process, thereby avoiding market cap and behavioral biases. In addition, the fund’s functioning and portfolio construction are back-tested and validated from time to time.
“The Passive+ approach that the fund follows is based on a number of quantitative factors that have been back-tested and historically proven to improve stock selection capabilities. The model says, “Manoj Shenoy, CEO, IIFL AMC It has a basic premise, in which the parameters are clearly set and relies on a defined procedure applying it to a set of comparable shares.”
“Based on a quantitative model, IIFL Quant Fund strategy is completely systematic and rules-based and will have additional filters for selection of quality momentum stocks. Parijat Garg, Fund Manager, IIFL AMC says, “The fund universe will comprise the top 200 stocks in terms of market cap and liquidity.”