NFO Alert: Quant Mutual Fund launches Business Cycle Fund; all you need to know

Quant Mutual Fund announced the launch of the Quant Business Cycle Fund, an open-ended sectoral or thematic fund scheme that seeks to generate long-term capital appreciation by investing with a focus on riding business cycles through allocation between sectors and stocks at different stages of business cycles.

The scheme opened for public subscription on May 12, 2023, and will close on May 25, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

Q. What kind of mutual fund scheme is this?

This is an open-ended sectoral or thematic fund that invests predominantly in Indian markets with a focus on riding business cycles through dynamic allocation between various sectors and stocks at different stages of business cycles. Capital appreciation in the long run is the primary focus of putting money in this fund.

Q. What is the main objective of investing in this fund?

The scheme seeks to generate long-term capital appreciation by investing with a focus on riding business cycles through allocation between sectors and stocks at different stages of business cycles. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme does not assure or guarantee any returns.

Q. How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of  ₹5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Instruments	Indicative allocations (% of total assets)		Risk Profile
Instruments	Minimum	Maximum	Risk Profile
Equity & equity related instruments including equity ETFs selected on the basis of the business cycle	80	100	Very High
Other equity and equity-related instruments including equity ETFs	0	20	Very High
Debt and money market instruments including debt ETFs & Gold & Silver ETFs	0	20	Low to Medium
Foreign securities including ADRs / GDRs / Foreign equity and debt securities	0	20	Very High
Units issued by REITs and InvITs	0	10	Very High

Q. Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such business cycle funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

Mutual Fund House	Name of the Fund
HSBC Mutual Fund	HSBC Business Cycle Fund
HDFC Mutual Fund	HDFC Business Cycle Fund
ICICI Prudential Mutual Fund	ICICI Prudential Business Cycle Fund
Axis Mutual Fund	Axis Business Cycles Fund
Kotak Mahindra Mutual Fund	Kotak Business Cycle Fund
TATA Mutual Fund	Tata Business Cycle Fund
Baroda BNP Paribas Mutual Fund	Baroda BNP Paribas Business Cycle Fund
Source: MoneyControl

Q. How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked against the NSE 500 TRI Index. The scheme is an open-ended equity scheme following a business cycles-based investing theme.

Q. Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” is also “Nil”.

Q. Who will manage this scheme?

Sandeep Tandon, Anikt Pande, Sanjeev Sharma, and Vasav Sahgal are the designated fund managers of this scheme.

Q. Does the fund contain any inherent risk?

The scheme involves “High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

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