Quantum Direct Investor Information Initiative

Know Our Funds: QESG and QLTEVF - Two Mutual Funds One Solution! Thursday, Sep 12, 2019

Recently, Quantum Mutual Fund launched Quantum India ESG Equity Fund (QESG), an open-ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme. Quantum also has its flagship open-ended equity scheme that follows a value investment strategy called as Quantum Long Term Equity Value Fund (QLTEVF).

At first instance, it might appear to a new investor or even to a seasoned investor that QESG and QLTEVF fall into the same category due to the some resemblance of investment universe for both funds. The investment universe comprises of companies that fulfill the liquidity criteria of average trading volume value of US$ 1 mn.

Given the apprehension of portfolio overlap makes investor wonder which fund to choose. Our recommendation to investors is simple and easy- You should choose both funds!

Confused? Let’s compare and contrast to understand what the investor is getting into by investing in both funds. Investment is a long term choice; hence, it is crucial that our investors - Know Our Funds.

• Before making an investment decision first step is to understand the investment strategy of the fund. QESG invests in companies that as per Quantum’s criteria rank high on Environmental, Social and Governance (ESG) scores banking on sustainability of these companies to drive long term returns. QLTEVF invests fundamentally strong stocks that are currently undervalued as compared to its future ascertained value and are likely to bounce back to its fair value over time.

• If you run a factor exposure on these strategies, QESG is quality and growth-oriented whereas, QLTEVF isquality and value-oriented.
Growth and Value exposures are complementary to each other and hence, adding both QESG and QLTEVF can add diversity to investor’s portfolio.

• The difference in strategies also leads to varied portfolio and therefore, puts investor concern about portfolio overlap at rest. Given below is the actual portfolio comparison:

Sector Exposure: as on 31st July, 2019
Sectoral CompositionQESGQLTEVF
Consumer Discretionary15.77%15.24%
Information Technology14.87%17.16%
Materials14.75%7.57%
Financials10.40%25.48%
Consumer Staples9.07%NA
Energy6.07%5.19%
Utilities2.47%7.97%
Industrials2.43%1.33%
Communication Services2.08%NA
Health Care0.77%5.27%
Cash21.32%14.79%
Total100%100%

Top 10 of QLTEVF – How much of it is owned by QESG as on 31st July, 2019
Top 10 Holdings QLTEVF QESG
Infosys Ltd8.90%3.20%
Housing Development Finance Corporation Ltd8.84%NA
Bajaj Auto Ltd5.50%1.05%
State Bank of India5.33%NA
Wipro Ltd4.62%2.72%
Hero MotoCorp Ltd4.49%0.95%
LIC Housing Finance Ltd3.73%NA
Tata Consultancy Services Ltd3.64%-4.15%
ICICI Bank Ltd3.38%NA
NTPC Ltd3.37%NA
Total Wt. of Top 10 Holdings51.80%12.07%

Stocks referred above are illustrative and not recommendation of Quantum Mutual Fund/AMC. The Scheme / Fund may or may not have any present or future positions in these Stocks. The above information should not be considered as research report or recommendation to buy or sell of any stocks.

Top 10 of QESG – How much of it is owned by QLTEVF? As on 31st July, 2019
Top 10 Holdings QESG QTLEVF
Tata Consultancy Services Ltd4.15%3.64%
HCL Technologies Ltd4.05%NA
HDFC Bank Ltd3.88%NA
Shree Cement Ltd3.50%NA
The Indian Hotels Company Ltd3.28%2.76%
Tata Chemicals Ltd3.24%NA
Infosys Ltd3.20%8.90%
Marico Ltd3.16%NA
TVS Motor Company Ltd2.72%NA
Wipro Ltd2.72%4.62%
Total Wt. of Top 10 Holdings33.90%19.92%

Stocks referred above are illustrative and not recommendation of Quantum Mutual Fund/AMC. The Scheme / Fund may or may not have any present or future positions in these Stocks. The above information should not be considered as research report or recommendation to buy or sell of any stocks.

Also, looking at the overall portfolio, the overlap is just 36% as on 31st July, 2019


• The benchmark for QESG is Nifty 100 ESG Total Return Index, while for QLTEVF is S&P BSE Sensex Total Return Index.
Investing in both funds gives investor the best of both strategies.

• As regards to asset allocation, QESG and QLTEVF have minimum equity allocation of 80% and 65% respectively. Comparing the portfolio holdings of both funds, the allocation to Money Market Instruments and Liquid Schemes of Mutual Funds will be at minimum for QESG while for QLTEVF, it can at times be higher if there are no opportunities from a valuation perspective available in the market. Whereas ESG will tend to run a well-diversified portfolio and will endeavor to stay invested in underlying equities to a large extent leaving little room for liquidity management.

Therefore, it is compelling to invest in both funds to efficiently diversify the portfolio across factor and style exposure and thereby enhance investors risk adjusted returns.

To sum up, investing in both QESG and QLTEVF will give investor One Mutual Fund, Two Different Style of Funds, One Long Term Investment Solution.

For quality holdings, transparent strategy and risk mitigation, suggest to invest in both QESG and QLTEVF!


Product Labeling
Name of the SchemeThis product is suitable for investors who are seeking*Riskometer
Quantum India ESG Equity Fund

(An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme)
• Long term capital appreciation

• Invests in shares of companies that meet Quantum’s Environment, Social andGovernance (ESG) Criteria
Quantum Long Term Equity Fund
Investors understand that their principal will be at High Risk
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
Quantum Long Term Equity 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.

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.QuantumMF.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.