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SBI Mutual Fund introduces the SBI Quant Fund, an open-ended equity fund utilizing a quant-based investing theme, aiming to navigate volatile market conditions with a multi-factor approach.
MUMBAI: SBI Mutual Fund has announced the launch of its new fund offer (NFO), the SBI Quant Fund, an open-ended equity fund that employs a quant-based investment strategy. The NFO is set to open on December 4 and will close on December 18.
SBI MF's latest fund is designed to perform well in volatile market conditions by focusing on four key factors: momentum, value, quality, and growth. The fund uses these factors to select stocks for its portfolio.
Nand Kishore, the Managing Director & CEO of SBI Funds Management, stated, "Multi-factor investing combines various factors rather than focusing on a single one, helping to smooth out the cyclicality of returns and reduce behavioral biases in factor selection. The scheme aims to generate long-term capital appreciation by investing in equity and equity-related instruments selected based on an in-house quant model. The fund’s benchmark is the BSE 200 index."
D P Singh, Deputy MD & Joint CEO of SBI Funds Management, added, “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 minimize behavioral biases. The SBI Quant Fund utilizes an in-house multi-factor model, incorporating factors such as Momentum, Value, Quality, and Growth to optimize performance across various market cycles.”
The fund's investment strategy includes allocating 80%-100% of its assets to equity and equity-related instruments chosen via a quantitative model. The remaining assets will be allocated as follows:
a) 0 – 20% in equity and equity-related instruments of companies other than those selected by the quantitative model. b) 0 – 20% in debt and debt-related instruments and money market instruments. c) 0 – 10% in units issued by REITs and InvITs.
The scheme also has the option to invest in units of mutual fund schemes, including domestic & overseas ETFs, up to 20% of the net assets. Additionally, the fund may explore investment opportunities in foreign securities, including ADR/GDR/foreign equity, overseas ETFs, and debt securities, not exceeding 35% of the net assets, in line with the maximum limits available from time to time.
