NFO Review: DSP Quant Fund

DSP Mutual Fund has launched a new quant-based mutual fund scheme called the DSP Quant Fund.

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DSP Mutual Fund has launched a new quant-based mutual fund scheme called the DSP Quant Fund. The new fund will systematically follow investment rules tested over market cycles with minimum human biases. The NFO will be open for subscriptions till June 03. It will be benchmarked against BSE200 TRI.

The fund will be managed by Anil Ghelani. According to a press release by the fund house, DSP Quant Fund will follow a three step process of elimination, selection and assigning weights.

According to the fund house, the elimination process will screen out companies that have very high debt, excessive price volatility and inefficient capital allocation. The remaining universe will be ranked based on multiple factors representing quality, growth and value. This process results in the selection of about 50 companies to whom appropriate weights are allocated quantitatively. The portfolio will be rebalanced semi-annually.


Should you invest?
Mutual fund advisors have never been fans of NFOs. They always ask investors to opt for mutual fund schemes with an established track record. “Apart from being a new fund, this scheme also runs on a new concept also. Quant-based approach of investing is a hit in the international market, but we are yet to see how it does in India. I think we should wait and watch,” says Puneet Oberoi, Founder, Excellent Investment Advisors. However, Oberoi believes that investors who want to experiment can go ahead. “If you are an established investor with a proper portfolio and you want to take a chance in the new tech investing, you should opt for this fund. But, retail investors can wait,” Oberoi suggests.

Scheme at a glance:
Name: DSP Quant Fund
Category: Thematic Fund
NFO open: May 20
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NFO close: June 3
Benchmark: S&P BSE 200 TRI
Fund manager: Anil Ghelani
Plans: Growth, Dividend
Type: Open-ended
Minimum investment: Rs 500
Exit Load: Nil

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