Is there an investment opportunity in PSP Projects shares?

With the focus on corporate governance resulting in a dramatic improvement in corporate disclosures the world of investing is witnessing a sea change due to availability of data. This changing paradigm represents a large opportunity for asset managers and promises to transform the fund management process for the better.

The successful adoption of this new wave can be done through what is known as quantitative techniques — essentially models that are trained to process this data and use it to come up with investment ideas. The specialised funds that use these approaches are called Quant funds.

Strategy

Quantitative strategy, an approach that is well entrenched in the west, is an alternative and complementary approach to the traditional way of investing in markets. It uses mathematical models and a systematic approach to carry out portfolio management. The strength of this process lies in its ability to analyse a large breadth of stocks and in bringing together diverse data points to identify the strongest investment opportunities. The model also allows the manager to construct a portfolio that balances risk-return objectives.

Axis Mutual Fund expects that as Indian markets and systems keep maturing, these products will gain importance and will occupy an important position in the investors’ portfolio. Therefore, the fund manager on Tuesday announced the launch of their new fund offer — ‘Axis Quant Fund’.

“This strategy through its proprietary in-house model aims to identify the strongest bottom-up stock opportunities to invest into while accounting for both risks and return prospects. The model aims to select a portfolio of quality stocks with good growth prospects but at reasonable prices. This approach for selecting stocks is augmented by disciplined risk management while carrying out portfolio construction,” Axis Mutual Fund said.

Who can invest?

The mutual fund house added that the fund is suitable for investors looking at new avenues of investing to diversify their existing portfolio of funds and aiming to allocate for the long term. The fund offers a unique proposition, combining the power of fundamentals with disciplined risk management. It aims to create a diversified portfolio that has the potential to work across the market cycle.

Features

a) An equity scheme that invests in equity and equity-related instruments selected based on a quantitative approach

b) Portfolio which captures the fundamental styles: Quality, Growth and Valuation

c) Stocks are evaluated using several fundamental parameters and weights are assigned using risk and other considerations.

d) The portfolio is reviewed and rebalanced periodically.

On the launch of the NFO, Chandresh Nigam, managing director and chief executive officer, Axis AMC, said: “The landscape of active equity investing has evolved and markets are becoming more efficient. While introducing new fund offers in the market, our constant aim has been to provide investors with a product basket that suits their needs and helps them diversify their portfolio, allowing them to make long term allocations. The launch of Axis Quant Fund is our attempt to continue that journey for investors by offering them a product that can use the power of data to create long term wealth.”