Quantum Long Term Equity Fund - Rating & Review - Good Large Cap Fund

Quantum Long Term Equity Fund – Rating & Review – Good Large Cap Fund

Roboadviso     Mutual Funds Rating     Posted On, Mon 19th December, 2016     No comments
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  • Quantum Long Term Equity Fund
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Quantum Long Term Equity Fund is an equity large cap fund, from the stable of Quantum Mutual Fund.  Let us find out more about the fund and if it is feasible to invest in it or sell it off.

Quantum Long Term Fund – Basic Information and Costs

It has been existence since the last ten years, founded on March 13, 2006.  It is benchmarked against S&P BSE TRI-Sensex. The fund has been perceived as ‘moderately high’ from the risk point of view.  The turnover of the fund has been 17 percent.  The minimum investment required for the fund is Rs. 500 with the minimum SIP amount, also as Rs. 500. The minimum withdrawal is Rs. 500.

There are different percentages for exit load for this fund. It is 4 percent if the redemption is done within 180 days, 3 percent if it is done between 181 and 365 days, 2 percent if it is done between 366 and 540 days, and 1 percent  if the redemption is between 541 and 730 days.

The AUM (Assets Under Management) of the fund is Rs. 616 crore.  The expense ratio is 1.25 percent, as on November 2016.

Portfolio

89.5 percent of assets of Quantum Long Term Fund, are pooled in equities, with 11.9 percent in debt.  On the basis of sectoral distribution, 22 percent of corpus is pooled in energy, 17.88 percent in automobiles, 16.24 percent in financial, 13.64 percent in technology and 3.26 percent in engineering.

The top 10 holdings of Quantum Long Term Fund are Bajaj Auto (7.33 percent), HDFC (6.50 percent), Hero MotoCorp (6.28 percent),  Infosys (5.69 percent), Tata Consultancy Services (5.24 percent), Tata Motors (4.27 percent), NTPC (4.26 percent), ICICI Bank (4.09 percent). State Bank of India (4.01 percent) and ONCG (3.09 percent). 

Performance

Quantum Long Term Fund has annually returned 16.14 percent in 1 year, 18.46 percent in 3 years and 18.85 percent in 5 years. It has performed admirably well, as compared to its peers.  Since inception, it has given 14.81 percent returns per annum. The fund has the most consistent performance in Large Cap space.

Analysis

Quantum Long Term Equity Fund follows a value-investing approach. With a superb long-term record, focus on large caps and low expense ratio, it makes for a solid fund to invest in. The fund has time and again, proven to contain downsides well, and do well in risky markets.  During the downturn between January 2015 and January 2016, the fund lost 12.5 percent, while the benchmark dip was 21 percent.

Even for the upsides, Quantum Long Term Equity Fund has done a great job, outperforming benchmarks at every step.  Consistency has been the middle name for the fund, as it outpaced the benchmark by 5 to 8 percentage points over the three to five-year spectrum.

Quantum Long Term Equity has distinguished itself as a top quartile performer in the large cap category across various time periods, with a 14.81 percent return in the past ten years or ever since it was launched.  Bear in mind that the fund may not give outstanding returns because at the end of the day, it is a large cap fund with focus on value-based investments. 

Another thing to note is that the fund has low expense ratio, at just 1.25 percent, the lowest in its category.  This is mostly due to the fund’s low portfolio turnover and direct distribution model.  During the last few months of financial uncertainty (Brexit, US Presidential Elections 2016), the fund increased its cash allocation to 10 percent. In recent months, the fund had increased exposure to financials and banks. With heavy cash inflows to the banks to demonetization drive, these stocks can rise in value.  The fund managers Atul Kumar and Nitesh Shetty, are known to take proactive calls on how the fund should move forward.  For instance, the fund recently reduced its holdings in software and auto companies because of US protectionist policies and the reduced consumer spending in domestic markets. 

Should I invest, sell or hold Quantum Long Term Equity Fund?

This fund is ideal for long-term investment. If you are looking for a good large cap fund, you can invest in Quantum Long Term Equity Fund.

 

Pros

Excellent Performance
Excellent Consistency
Very low Expense Ratio
Good Fund Managers

Cons

Average Fund house
Small Fund size

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