UTI Quant Fund: UTI MF's Entry into Quantitative Investment Strategies

UTI Mutual Fund has launched UTI Quant Fund, it is an open-ended equity scheme following a quantitative investment theme.

Quantitative investment strategies, rely on algorithms and statistical models to guide decision-making. By analysing vast datasets, these strategies eliminate emotional biases and bring discipline to stock selection. They excel in identifying patterns and opportunities that human intuition may overlook.

In 2025, as markets are driven by diverse factors such as global economic trends, geopolitical developments, and sectoral rotations, quant strategies hold the potential for delivering consistency in performance. However, their reliance on historical data and predefined parameters can limit flexibility during unprecedented market shifts or extreme volatility.

[Read: All You Need to Know About Quant Funds]

What will be the investment strategy for UTI Quant Fund?

UTI Quant Fund follows an active investment strategy. The outlined strategy of the fund seeks to achieve long-term capital growth by following a quantitative investment approach. The fund's investment approach intends to integrate fundamental research with quantitative approach using market indicators.

The fund manager while selecting stocks will focus on the fundamentals of the business, the quality of management, the financial strength of the company, market leadership, etc.

The quantitative approach emphasizes factors that offer insights into a company's growth prospects and valuation. These factors may act as a guiding framework and include factors such as Quality, Growth, Value. Key sub-indicators may encompass metrics such as Return on Equity, Sales Growth, Cash Flow, Debt to Equity Ratio, Earnings Growth variability, Price to Book, Price to Earnings, and Dividend Yield, among others. These factors are selected for their strong relevance in evaluating a company's financial health & valuations.

In addition to the above factors, the investment approach integrates factors that capture behavioural attributes reflected in stock price movements. These factors include Liquidity, Stock Price Momentum, Volatility, and Historical Performance, among others.

The fund intends to adjust dynamically across the factors based on long-term historical trends, recognising that different factors tend to perform relatively better during different macro-economic & market cycles.

How will the scheme allocate its assets?

Under normal circumstances, UTI Quant Fund will hold an allocation of 80% to 100% in Equity and equity related instruments based on quantitative investment theme, 0% to 20% in Equity and equity related instruments other than based on quantitative investment theme, 0% to 20% in Debt and Money market instruments and 0% to 10% in Units issued by REITs and InvITs.

Should investments in UTI Quant Fund be considered?

The UTI Quant Fund offers a unique investment approach by relying on data-driven algorithms to select stocks, eliminating human biases. It uses predefined quantitative models to ensure systematic and objective decision-making, making it an attractive option for investors seeking transparency and consistency in portfolio management.

One of the key advantages of this fund is its potential for diversification across sectors and market caps, driven by statistical models that aim to identify promising opportunities. Additionally, the disciplined approach of quant funds can deliver better returns in certain market conditions, especially when emotions and human errors play a significant role in traditional fund management.

However, the fund may face some challenges. The rigid nature of algorithms can limit adaptability during unprecedented market events or high volatility. Moreover, the reliance on historical data might not always predict future performance accurately, and quant funds may underperform during market disruptions. This makes them more suitable for investors who understand the risks involved and have a moderate to high-risk appetite.

Overall, UTI Quant Fund is a good fit for seasoned investors with a long-term horizon who value systematic investing and are comfortable with occasional market-driven fluctuations. Beginners or risk-averse investors may prefer more traditional equity funds or balanced portfolios for stability and consistent returns.