Quant MF bullish on energy, infrastructure, hotel sectors

In the February factsheet, Quant AMC said they are shifting their focus from defensive large-cap stocks to a more aggressive style-investing in select small and mid-cap stocks.

- Sashind Ningthoukhongjam & Neil Borate

In the February factsheet, Quant AMC said they are shifting their focus from defensive large-cap stocks to a more aggressive style-investing in select small and mid-cap stocks. Their performance also suffered in the past six months. According to Value Research, their top 3 funds by size, Quant Small Cap, Quant ELSS, and QuantActive Fund, have been the worst performers in the last year. This was mainly due to the large exposure they built in Reliance Industries and Jio Financials, which did not move much.

In the past six months, RIL is down 15%, and Jio Financials is down by 28%. "In the coming weeks and months, we will begin pruning our defensive exposure toward more cyclical and growth-oriented segments," Quant MF said in a recent communication to investors.

The benchmark Nifty 50 fell 10% from its lifetime high of 26,216 points in September. When the cycle turns, the firm believes select high-beta small-cap stocks will rebound faster than the rest of the market.

"Allocations will tilt in favour of select high-beta names, particularly within the small-cap category, which are historically quicker to recover during market rebounds," Quant wrote in its February factsheet. "Such a strategy aligns with the fund's overarching philosophy of leveraging periods of market pessimism to build positions in high-potential areas."

In an interview with Mint, Sandeep Tandon, founder and chief thought officer of Quant MF, shared his views. Edited excerpts:

You had invested in big conglomerates (RIL & Adani) but that hasn't worked out well. Would you tell us the reason?