Is Your Portfolio in a Free fall? Or Are You on Your Dream Vacation

Posted On Tuesday, May 31, 2022


Stock markets are down – are you one of those investors who is up at night worrying about what will happen to your portfolio? Or are you one who has adequately planned for your future?

Good things happen when you plan for them. Not when you make emotional or rash decisions or blindly follow trends.

For instance, when you plan for that much awaited dream vacation, you perhaps go through a checklist of what to carry, you research to find the best hotel that will suit your needs, you use simple tools and calculators to compare prices for airlines etc.

But to make that dream vacation or any other financial goal happen, how much time have you spent in planning your portfolio?

Chances are that, if you are a thoughtful investor, you would have kept aside your investments in various buckets - in various asset classes - and still be smiling today as you enjoy realizing your much awaited vacation.

If you haven’t, don’t worry, it’s never too late , we have a simple solution that can help – our 12:20:80 Asset Allocation Approach. You can also use the calculator available once you login to your Invest Online account to allocate across the three asset classes in just a few clicks.

Fig 1: Quantum’s Proprietary 12:20:80 Asset Allocation

Asset-Allocation-Guide

**Please note the above is a suggested fund allocation only and not as an investment advice / recommendation.

A Step Further

For those thoughtful investors that have diversified across the three asset classes of Equity, Debt and Gold, it may be a good time to review your Equity portfolio by asking the following questions:

• Are your investments skewed to a sector, market cap, or theme?

• Is your portfolio chasing momentum and ignoring value?

• Are you getting swept by emotions and taking decisions that may disrupt your long term financial journey?

Just as diversification across the three asset classes is important – a diversified equity basket help in achieving your overall wealth creatin goals. Under 12:20:80 we suggest the following allocation.

Fig 2: Diversify your Equity Portfolio

FundAllocationBenefit
Quantum Equity Fund of Funds70%1 Fund = 5-10 well researched diversified Equity schemes
Quantum India ESG Equity Fund15%Shortlists companies based on environmental, social and governance parameters
Quantum Tax Saving Fund or Quantum Long Term Equity Value Fund15%Follows value style lowering downside risks and helps achieve long term goals

Please note the above is a suggested fund allocation only and not as an investment advice / recommendation.

Value is Making a Come Back!

For those thoughtful investors that already have Value in your portfolio, we believe that it is a good time to hold on to it – even though you may be tempted to sell based on past performance and higher declines.

As you see in the graph below, value investing has slowly turned back in favour.

Fig 3: Value Investing is Making a Comeback

Value Investing is Making a Comeback

Source: MSCI Value Index India. YTD Data as of April 30, 2022. Past performance may or may not be sustained tomorrow.

In a rising interest rate environment, a value fund with a portfolio comprising of businesses with reasonable valuations and less leverage would have fallen lesser during market downturns. Quantum Long Term Equity Value Fund, a true-to-label fund since 2006, is positioned for broad based economic revival.

Fig 4: 6 Reasons to invest in Quantum Long Term Equity Value Fund

Follows the tenets of Value InvestingOver 16 years track recordAims to deliver long-term risk adjusted returnsMinimizes downside during periods of uncertaintyBottom-up portfolio constructionWell-researched and diversified portfolio

However, you must remember that “Value” like “Growth” is a style. Every style goes through its cycle.

The table below indicates how the equity-gold portion of the 12:20:80 Portfolio would have performed during different periods of macroeconomic uncertainty with and without a value fund:

Fig 5: How a Value Fund complements Your Equity Portfolio

Fund12-20-80 AllocationS&P Sensex TRI
Investment Value100,000100,000
Quantum Equity Fund of Funds56,00064000
Quantum Long Term Equity Value Fund12,000-
Quantum India ESG Equity Fund12,00016000
Quantum Gold Savings Fund20,00020000
Market Value98,827.0696,318.13
Correction-9.5%-11.04%

YTD as of April 30, 2022. The above table to be read in conjunction with the complete fund performance below. Past performance may or may not be sustained in the future.

While undoubtedly holding on to a value fund helps lower the impact of market downturns, choose a diversified equity portfolio to capture the opportunities across market cycles. Use this correction as a good opportunity to add/rebalance your equity basket and hold on for the long term.

So, whether stock markets are down or not, adopt 12:20:80 so that you can sleep at night and take your family on that long-awaited vacation.

It’s your ticket to take off, even when markets are down!



#S&P BSE 500 TRI, ##S&P BSE 200 TRI, ###S&P BSE Sensex.
Data as of April 30, 2022.
Past performance may or may not be sustained in future.
Load is not taken into consideration in scheme returns calculation.
Different Plans shall have a different expense structure.
Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR).
#with effect from December 01, 2021 Tier 1 benchmark has been updated as S&P BSE 500 TRI. As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR S&P BSE 500 index PRI Value from March 13, 2006 to July 31, 2006 and TRI Value since August 1, 2006.
##TRI data is not available since inception of the scheme, Tier 2 benchmark performance is calculated using composite CAGR S&P BSE 200 index PRI Value from March 13, 2006 to July 31, 2006 and TRI Value since August 1, 2006
The Fund is managed by Mr. Sorbh Gupta and Mr. George Thomas. Mr. Sorbh Gupta has been managing the fund since Dec 01, 2016. Mr. George Thomas has been managing the fund since April 01, 2022 Click here to view other funds managed by Mr. Sorbh Gupta and Mr. George Thomas.


#S&P BSE 200 TRI, ##S&P BSE Sensex TRI.
Data as of April 30, 2022.
Past performance may or may not be sustained in the future. Load is not taken into consideration in scheme returns calculation. Different Plans shall have a different expense structure. Returns are net of total expenses and are calculated based on Compounded Annualized Growth Rate (CAGR). The fund is managed by Mr. Chirag Mehta since Nov 1, 2013. Mr. Chirag Mehta manages 4 Schemes of Quantum Mutual Fund. For other schemes managed by him, please Click here.


#NIFTY100 ESG TRI, ##S&P BSE Sensex TRI.
Data as of April 30, 2022.
Past performance may or may not be sustained in the future. Load is not taken into consideration in scheme returns calculation. Different Plans shall have a different expense structure. Returns are net of total expenses and are calculated based on Compounded Annualized Growth Rate (CAGR). The fund is managed by Mr. Chirag Mehta and Ms. Sneha Joshi. Mr. Chirag Mehta and Ms. Sneha Joshi manage the fund since Jul 12, 2019. Mr. Chirag Mehta manages 4 Schemes of Quantum Mutual Fund. For other schemes managed by them, please Click here.


#Domestic Price of Physical Gold, ##CRISIL 10 Year Gilt Index.
Data as of April 30, 2022.
Past performance may or may not be sustained in the future. Different Plans shall have a different expense structure. The fund is managed by Mr. Chirag Mehta. Mr. Chirag Mehta is handing the fund since May 19, 2011. For other funds managed by Mr. Chirag Mehta, please Click here.


Related Articles
Add Value to your Equity Portfolio with Value Investing
Is Value Investing Here To Stay?
Stay Ahead of Inflation During These Uncertain Times

Product Labeling

Name of the Scheme & Tier I BenchmarkThis product is suitable for investors who are seeking*Risk-o-meter of SchemeRiskometer of Tier I Benchmark
Quantum Equity Fund of Funds

An Open Ended Fund of Funds scheme Investing in Open Ended Diversified Equity Schemes of Mutual Funds

Tier I Benchmark: S&P BSE 200 TRI
• Long term capital appreciation

• Investments in portfolio of open-ended diversified equity schemes of mutual funds registered with SEBI whose underlying investments are in equity and equity related securities of diversified companies
Quantum Long Term Equity Value Fund
Investors understand that their principal will be at Very High Risk
Quantum Long Term Equity Value Fund
 
Quantum India ESG Equity Fund

An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme

Tier I Benchmark: NIFTY100 ESG TRI
• Long term capital appreciation

• Invests in shares of companies that meet Quantum's Environment, Social, Governance (ESG) criteria.
Quantum Long Term Equity Value Fund
Investors understand that their principal will be at Very High Risk
Quantum Long Term Equity Value Fund
 
Quantum Gold Savings Fund

An Open Ended Fund of Fund Scheme Investing in Quantum Gold Fund

Tier 1 Benchmark: Domestic Price of Physical Gold
• Long term returns

• Investments in units of Quantum Gold Fund – Exchange Traded Fund whose underlying investments are in physical gold
Quantum Gold Savings Fund
Investors understand that their principal will be at Very High Risk
Quantum Gold Savings Fund
 

Name of the Scheme & Tier I BenchmarkThis product is suitable for investors who are seeking*Risk-o-meter of SchemeTier I Benchmark Tier II Benchmark
Quantum Long Term Equity Value Fund

An Open Ended Equity Scheme following a Value Investment Strategy

Tier I Benchmark: S&P BSE 500 TRI

•Long term capital appreciation


• Invests primarily in equity and equity related securities of companies in S&P BSE 200 index

Quantum Long Term Equity Value Fund
Investors understand that their principal will be at Very High Risk
Quantum Long Term Equity Value Fund
 
Quantum Long Term Equity Value Fund
 

Name of the Scheme & Tier I BenchmarkThis product is suitable for investors who are seeking*Risk-o-meter of Scheme
Quantum Tax Saving Fund

An Open Ended Equity Linked Saving Scheme with a Statutory Lock in of 3 years and Tax Benefit.

• Long term capital appreciation

• Invests primarily in equity and equity related securities of companies in S&P BSE 200 index and to save tax u/s 80 C of the Income Tax Act. Investments in this product are subject to lock in period of 3 years.
Quantum India ESG Equity Fund
Investors understand that their principal will be at Very High Risk
Quantum Gold Fund

An Open Ended Scheme Replicating / Tracking Gold
• Long term returns

• Investments in physical gold
Quantum Gold Savings Fund
Investors understand that their principal will be at High Risk
Quantum Liquid Fund

An Open-ended Liquid Scheme. A relatively low interest rate risk and relatively low credit risk.)

• Income over the short term

• Investments in debt / money market instruments
Quantum Liquid Fund
Investors understand that their principal will be at Low Risk
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
The Risk Level of the Scheme in scheme Risk O Meter is basis it's portfolio as on April 30, 2022.
The Risk Level of the Tier I Benchmark & Tier II Benchmark in the Risk O Meter is basis it's constituents as on April 30, 2022

Potential Risk Class Matrix - Quantum Liquid Fund
Credit Risk →Relatively LowModerate (Class B)Relatively High (Class C)
Interest Rate Risk↓
Relatively Low (Class I)A-I  
Moderate (Class II)   
Relatively High (Class III)   



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.

Mutual fund investments are subject to market risks read all scheme related documents carefully.

Please visit – www.QuantumAMC.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

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