Best Quant Equity Mutual Funds

With a history spanning more than 20 years, Quant Mutual Fund is one of India’s largest and oldest mutual funds. Its investment products are distributed across various asset types. As of March 2021, the average quarterly assets under management of this AMC stood at Rs.721.48 crore. 

This AMC currently offers more than 10 mutual fund schemes spread across equity, debt, and hybrid fund categories. In addition, they include the best quant equity mutual funds.

An equity fund is a financial instrument that bears the potential of delivering high inflation-beating returns to its investors. They invest most of the corpus in equity shares or stocks listed on stock exchanges like NSE or BSE. These companies belong to varying market capitalisations. 

With most of their investments belonging to the equity domain, the top quant equity mutual funds are accompanied by a certain degree of market risk. However, this risk factor also makes them capable of yielding substantial returns. 

One of the most significant benefits of equity MFs is they spread investments across various stocks. It mitigates the risk of realising massive losses should one company perform poorly. By way of mutual funds, losses from one share price falling are offset by another’s price climbing up. Thus, they are less risky than direct investments in stocks. 

Moving on, equity mutual funds are classified into different kinds premised on market capitalisation or sectoral preference. They contain large-cap, micro-cap, multi-cap, small-cap, mid-cap, and thematic funds. 

While carrying out the investments, the best quant equity mutual funds follow a particular mandate. This implies that large-cap schemes would not make investments in small-cap organisations, and thematic equity schemes would make investments in equities around a specific theme.

Based on investment style, there are two types of equity funds – active and passive. The former is where fund managers actively buy and sell securities to generate maximum risk-adjusted returns. The latter tracks a specific stock market index like Nifty Next 50 or Sensex. 

The best quant equity mutual funds invest a minimum of 65% corpus in equity shares, while the remaining 35% might be invested in money-market or debt instruments. This, in turn, helps address the redemption requests made by investors effectively. 

More than 8 equity fund schemes are featured in this AMC’s current offerings.

Taxability

Knowing the facts illustrated above about the best quant equity mutual funds can prove to be highly helpful, but investors must also be familiar with the taxability involved.

TDS: A 10% TDS will apply to dividends above Rs.5000, according to Section 194K. 

Long-term Capital Gains Tax: On redeeming equity fund units after a holding period of 1 year or more, an investor earns long-term capital gains (LTCG). Such gains are exempt from taxation till they are within a limit of Rs.1 lakh in a financial year. An LTCG tax at a 10% rate applies to any amount above this limit.

Short-term Capital Gains Tax:  By selling equity fund units within a 1 year holding period, an investor earns short-term capital gains (STCG). It attracts a 15% tax, notwithstanding the sum.

Factors to Consider Before Investing

Besides being familiar with the taxability applicable to the top quant equity mutual funds, an investor must note the below-mentioned parameters.

Expense ratio: It is the fee mutual fund houses charge for managing a scheme. The fee for record-keeping and that of the fund manager is also included here. 

Risk appetite: Before diving into the investment part, one must note that a substantial level of risk comes with an equity mutual fund. One may want to compare the associated risk levels of the best quant equity mutual fund. Large-cap funds involve the least risk among other equity MF subtypes. Micro-cap and thematic funds are the riskiest options. Reviewing this will let investors select a scheme that aligns with their investment objective. 

Method of investment: One can invest in the best quant equity mutual funds 2021 in fixed periodic deposits via SIP. Or else, they can invest the entire sum at once through the lump-sum method. The former offers benefits like rupee-cost averaging, whereas the latter method can be used to buy a greater number of units when NAV runs low. 

Scheme’s past performance: Prospective investors can consider reviewing the past performance of a scheme prior to deciding. Studying their returns under different market conditions can be useful in determining a fund’s risk and liquidity management capacities. However, previous performance is seldom a guarantee of its future returns. 

While venturing into the investment domain for the first time, budding investors might find it difficult to choose a suitable scheme from the best quant equity mutual funds. In such cases, having basic knowledge about mutual funds and using this article as a reference would enable them to sail through the investment process with ease.