InvestorQ : IIFL has recently launched a new Quant Fund. Should I invest in the fund?
Diya Chitale made post

IIFL has recently launched a new Quant Fund. Should I invest in the fund?

Siya Saran answered.
9 months ago
IIFL Mutual Fund has recently launched a new fund called the IIFL Quant Fund that follows a momentum-based investing strategy. The fund aims to invest in the BSE 200 stocks universe that is outperforming along with potential high-return stocks (ROEs of over 15%). The main objective is to maximize exposure to risk-adjusted momentum while limiting exposure to single security or sector.

  • The approach of the newly launched Quant Funds includes:
  • Composite momentum score based on stock returns in the recent past.
  • A comprehensively adjusted momentum score for quality of momentum.
  • Screening of quality stocks based on proprietary investment framework.
  • Optimization of portfolio for maximum exposure.
  • Avoiding sector overweight or underweight to reduce risk from sector rotation.
The IIFL Quant Fund will have a 3% limit on every stock investment at the time of rebalancing the portfolio. The rebalancing will take place after an interval of six months. However, the fund may have some stocks with a lower allocation when compared to others. This feature is immensely effective towards diversification and mitigating the negative impact on the overall returns. The S&P BSE 200 Total Return Index (TRI) is the benchmark for the IIFL Quant Fund.

If you are looking to invest in an equity-focussed fund that has a high return potential, you can apply to the fund as the IIFL focussed equity has done well in the past by generating compounded annualized returns of 17.5% since its launch in 2014. The NFO is open till November 22, 2021.