Posted On Friday, Jun 24, 2016
June 2016 seems to have become the Exit month, with Dr. Rajan, governor of the RBI announcing his exit (Rrexit, as we call it) and now the British seem to want out of the EU.
The referendum results are out and a majority of British voters have voted in favor of Brexit (In favour of Britain exiting the EU). After 43 years in an historic referendum Britain has the dubious distinction of being the first nation to move out of the EU. Only time will tell what could be the possible repercussions.
While the British decided to leave the European Union, it brought turmoil for markets around the world. The Indian markets nose-dived by over 950 points at the time of writing this article.
Time to hit the panic button? Surely not, for Indian investors as Ajit Dayal talks about both Brexit and Rrexit in this video .
When it comes to equity mutual fund investments there are times when events like this – EU referendum might shake the balance of the market. At Quantum, we believe and urge our investors to stay clam at such times. Stay invested.
With the Quantum Long Term Equity Fund completing its 10 year track record successfully, we would to re-iterate our commitment to you, our investor. We can commit to you, in the strongest possible terms, that there will be no change whatsoever to our investment philosophy. Everything from the stock selection process to the low cost approach to maintaining transparency, the fund has and will always abide by its fundamental characteristics.
3 things that QLTEF will stay committed forever -
1. True Value investing
Quantum follows the value investment style while investing.
True to the value investing principles, we buy when we believe a company`s valuation is cheap relative to its long term earning potential and historical valuations and we sell when we believe a company`s valuation is expensive based on the long term earnings potential and historical valuations. This analysis is at a stock level and not at the Index level. Whenever our pre-determined buy limit for a stock is triggered, the company becomes part of the portfolio and whenever a sell limit is triggered we exit the stock. Whatever remains is cash.
Therefore when the markets are running up on sentiment - we will not invest in stocks with inflated values.
2. Bottom up stock picking process
At Quantum we have generally tried not to over-emphasize on macroeconomic analysis and the levels of the stock market from interfering too much in our research process.
We remain rooted to the bottom up stock selection process; hence our source of what is happening in the economy comes from the company managements we closely track, their customers, their vendors etc which is then fed into our research models. It has allowed us to stay firmly focused on projecting where a company’s earnings are headed ignoring the noise around the credibility of GDP growth numbers. The earnings forecast arrived at, then forms the basis to arrive at the buy and sell limit for each company, which eventually forms the foundation of portfolio construction. It has allowed us to build a credible track record of performance over long periods of time. This is irrespective of whether the CSO says the economy is growing at 5.5% or 7.5%.
Therefore irrespective of the noise about the economy or whether the stock in question is in ‘trend’ your fund house will not deviate from the processes we have set to pick stocks that should be part of the Equity portfolio.
We follow a bottom-up stock selection process depicted as below –
|Clients get best of bottom up ideas with a risk control measurement for each sector < 40 stocks|
|Portfolio of stocks with broad exposure to various sectors|
Reflecting three broad themes: domestic consumption, exports and infrastructure
|Regular meeting to review ideas and approve value stocks for the database 100 stocks|
|Analysts study stocks in their sector in India with global comparisons wherever necessary. The universe is generally S&P BSE 200 with flexibility to include new issues. Research includes visit notes, financial models and investment thesis, supplemented with broker research.|
3. Helping you achieve your long term financial goals
Last but not the least Equity investments are ideally for long term. QLTEF has the potential to help you generate high returns with high risk over the long term. Click Here to read more about Quantum Long Term Equity Value Fund.
Thus we re-iterate our commitment to investors that be it Brexit or Rrexit or any exit, or any rule changes by the regulator will not prevent us from serving your best interests – Ever.
|Name of the Scheme & Primary Benchmark||This product is suitable for investors who are seeking*||Risk-o-meter of Scheme|
|Quantum Long Term Equity Value Fund |
An Open Ended Equity Scheme following a Value Investment Strategy
|• Long term capital appreciation|
• Invests primarily in equity and equity related securities of companies in S&P BSE 200 index.
Investors understand that their principal will be at Moderate Risk
* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors.
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