NFO Update: SBI Mutual Fund launches SBI Quant Fund

SBI Mutual Fund introduces the SBI Quant Fund, an open-ended equity scheme targeting long-term capital growth. The fund claims to employ a data-driven, multi-factor investment strategy to maximize returns.

NFO Details

The SBI Quant Fund New Fund Offer (NFO) opens on December 4, 2024, and closes on December 18, 2024. This equity scheme, which is open-ended, will primarily invest in equity and equity-related instruments chosen using an in-house quantitative model. The benchmark for the fund is the BSE 200 TRI. The minimum investment for the initial application is Rs 5,000, with further investments in multiples of Rs 1. For additional purchases, the minimum amount is Rs 1,000, with subsequent investments also in multiples of Rs 1.

According to SBI Mutual Fund, the SBI Quant Fund invests in stocks and equity-related securities chosen using an internal quantitative model with the aim of producing long-term capital growth. This strategy seeks to build a diversified portfolio, reduce performance cyclicality and minimize behavioral biases through a rule-based process.

This fund will allocate 80 per cent to 100 per cent of its assets to equity and equity-related instruments identified by the quant model. The fund may also allocate 0 per cent to 20 per cent in debt instruments, 0 per cent to 10 per cent in REITs and InvITs, and up to 35 per cent in foreign securities, including ADRs, GDRs, and ETFs, to provide balanced exposure across domestic and international markets, according to SBI Mutual Fund.

Nand Kishore, Managing Director & Chief Executive Officer, SBI Funds Management Limited, said, "The evolving landscape of factor-based investing presents opportunities for diversification and better risk-adjusted returns. Multi-factor investing combines various factors to reduce cyclicality and behavioral biases, helping investors achieve superior risk-adjusted returns with our SBI Quant Fund, which uses an in-house model incorporating Momentum, Value, Quality, and Growth."

D P Singh, Deputy MD & Joint CEO, SBI Funds Management Limited, said, "By integrating established equity factors, each with distinct risk/return profiles, the fund aims to deliver optimal risk-adjusted returns and minimise behavioural biases."

Who should invest?

SBI Mutual Fund recommends that this fund is suitable for investors seeking long-term capital appreciation, with a focus on India’s growth story. It suits those looking for a diversified, rule-based strategy to optimize risk-adjusted returns by leveraging factors like Momentum, Value, Quality, and Growth.