Quantum Mutual Fund launched Quantum Small Cap Fund

At a time when the investors are looking to grab a pie of the small cap stocks, Quantum Mutual Fund has launched the new fund offer (NFO) of Quantum Small Cap Fund (QSF).

QSF is an open-ended equity scheme predominantly investing in Small Cap Stocks. It will be co-managed by Chirag Mehta and Abhilasha Satale. The scheme will be benchmarked against S&P BSE 250 Small Cap total return index (TRI).

While defining the investment philosophy of the scheme the fund house has made it clear that this scheme will remain true to label by preventing large size becoming a hindrance to performance. It further made it clear that the portfolio will have 25-60 high conviction stocks with ample liquidity – minimum Rs 2 crore average trading value per day in each stocks. The fund house will allocate minimum 2% to each stock and would limit ownership to 5% of the company’s market capitalisation.

Chirag Mehta, Chief Investment Officer & Fund Manager, Quantum AMC, said, “To ensure good returns for our customers, we will make investments in lesser-known, smaller businesses with growth prospects. Over a period of time, these companies increase their revenue and earnings, which can ensure good returns for our investors.” The Quantum Small Cap Fund will limit its AUM size to an optimal level, which will enable it to hold a high-conviction, liquid portfolio of promising small cap businesses, he added.

Large size and rising investors’ interest have made a few small cap funds like SBI Small Cap Fund, Tata Small Cap Fund, Nippon India Small Cap Fund to restrict inflows through systematic investment plans. There were 24 active small-cap funds with Rs 1.98 lakh crore of assets as of September 30, 2023.

I. V. Subramaniam, MD & Group Head- Equities, Quantum Advisors – Sponsor to Quantum Mutual Fund, said, “Many of the new startups that have sprung up to solve many problems faced by the population could eventually list as small-cap companies and then eventually grow into sizable companies in the mid-cap or large-cap space.”
Small cap funds on an average have given 24.82% and 34.04% returns respectively in last one and three years respectively.