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Subbu's Solution

How critical is the NPA's issue in the banking sector? Do you have banking stocks in your portfolio?
Quantum Long Term Equity Fund (QLTEF) has banking stocks in its portfolio. Please click here to view last month's factsheet to know the extent to which we are exposed to banking stocks. While NPA's are critical to the banking sector - QLTEF owns banks in which the banking analyst is able to make some estimate of the risk. So the expected NPA is broadly factored in, secondly QLTEF has invested in these banks when the valuations were very favourable. The RBI and government are closely monitoring the situation and necessary action could follow soon. What our fund managers look at is also beyond the numbers, do the managements in these banks have the right mindset? Do they have the will and the ability to take on this and any other problem that may emerge and resolve it in a manner that does not affect the retail shareholder and customer? Only if all the qualitative and quantitative boxes are ticked, do we invest in these stocks. Please take note that the response here with respect to the banking stocks held in the portfolio of QLTEF is not a buy or sell recommendation for such banking stocks.

Disclaimer:

Subbu's Solution is authored by I. V. Subramaniam. I. V. Subramaniam is a director of Quantum Asset Management Company Private Limited. The responses expressed here are strictly for information and explanation purpose only. The responses are meant for general reading purpose and not to be considered as an investment advice / recommendation. The responses are not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or units of the Mutual Fund. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in the responses.

Risk Factors: 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 scheme's objective will be achieved and the NAV of the scheme(s) may go up or down depending upon the factors and forces affecting securities markets. Investment in mutual fund units involves investment risks 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 (AMC). The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

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