DailyPost 2674
QUANT – A FUND IN IT’S OWN CLASS!
The nature of investing defines a country in terms of the businesses, growth potential and the level people understand the economy and economic activities that define them. The stock market happens to be the most common denominator of the way economy has been facing and what goes behind. It also naturally factors in a big way the sentiments in the economy; at times in different sectors, even in different business enterprises. Stock market is complex game but being out of it and gaining handsomely on investments is also not possible.
The only way out it to bite the bullet. Getting into it by way direct stock gives a scare to large part of our investing population. So, the other way out, which has been gaining ground in recent times, has been the mutual funds. One fund manager manages the assets under that fund and is responsible to provide a at least a reasonable alpha. There are different themes / sectors, and at times different styles of investment are also talked about. Nonetheless, it is research and analysis that it at the core, both depending on the capability of the fund manager. Whether data has a wholesome play in this exercise, we are not aware of.
Can the fund manager have a bandwidth beyond a point? Is our money being invested in a routine manner, with some run of the bill data and standards, which he set for himself? Does the customer evaluate the fund and then take a call? Have the investors ever rated a fund manager or the company but for digesting the graphs and charts thrown on us. Eighty five percent of the funds don’t beat the bench mark, is a sad commentary on where they are. The portfolio turnover ratio is a manifestation of their lack of efforts. That they are delivering more than the fixed deposits, is like comparing monarchy with democracy. We live in the melting pot of data and with out of the world tools at our command, a data driven approach would be ideal.
Quant Mutual Fund/s seems to have broken the barrier. Quant or quantified we may call; they have generated impressive returns for over three years in nearly all their funds consistently. Data is at the core and its churning on their self-created model, which does the job. The taste of the pudding is in eating it. Predictive analytics is on full display in the interest of the retail investor. The fast-increasing AUM tells the story. Quant believes in very little in human intervention. The data enabled magic formula is what all Quant funds run on and deliver with maximum possible precision. The fund manager has no larger-than-life role to play. Their tagline is “Being relevant with predictive analytics.” The core engine has the capability to work beyond the horizon. The current usage of data can at best be called rudimentary, in comparison to what it can really deliver.
DATA ENABLED INVESTMENT HAS TO BE TAKEN TO A DIFFERENT LEVEL TO MEET INVESTOR ASPIRATIONS.
Sanjay Sahay
Have a nice evening.