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Active vs Passive

Active vs Passive

There are two styles of investing; active and passive. View the webinar presentation to understand their key differences & how these funds can help you reach your financial goals.
This webinar PPT will answer questions like:
• What is the difference between active vs. passive funds?
• What types of funds are suited for different risk appetites?
• Do active funds have an edge over passive funds?
Website: www.Quantumamc.com

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Quantum Mutual Fund

July 12, 2021
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Transcript

  1. Active vs Passive Investing - A Quantum Perspective Speakers: Mr.

    Nilesh Shetty, Fund Manager – Equities July 9th 2021
  2. In 2008, 13 Years Ago, QMF launched Quantum Nifty ETF:

    A low-cost method to participate in the stock markets Q NIFTY ETF – Inception date : 10-July-2008 Source: Quantum AMC , As of June 30, 2021 Past performance may or may not be sustained in future. This graph should be reviewed in conjunction with detailed performance of the scheme provided on slide number 8. 50 100 150 200 250 300 350 400 450 500 550 600 650 10-Jul-08 30-Jun-21 Quantum Nifty ETF S&P BSE Sensex TRI Nifty 50 TRI N A V Period Quantum Nifty ETF (Base = 100, as on 10th July 2008)
  3. If we are so focused on being a “low-cost” mutual

    fund house, working to help investors, Why do we not amplify the Index Fund?
  4. It’s not because we don’t want you to have low-cost

    solutions; it’s because we believe the evolving Indian stock markets allow investors to potentially make higher returns for lower risk with low-cost actively managed funds Mutual Fund = Returns – Cost; for equivalent risk
  5. The Quantum Long Term Equity Value Fund has outperformed its

    BSE-200 Benchmark and the Q NIFTY ETF as on June 30, 2021 Q NIFTY ETF – Inception date : 10-July-2008 Source: Quantum AMC , As of June 30, 2021 Past performance may or may not be sustained in future. This graph should be reviewed in conjunction with detailed performance of the scheme provided on slide number 7 & 8.
  6. QLTEVF vs QNIFTY ETF Comparing QLTEVF & QNIFTY ETF Risk

    Since Inception Q NIFTY ETF – Inception date : 10-July-2008 Source: Quantum AMC , As of June 30, 2021 Past performance may or may not be sustained in future. Period QLTEVF SD QNIFTY SD 1 year 13.43% 14.85% 3 years 21.83% 22.14% 5 years 17.99% 18.50% 7 years 16.88% 17.41% 10 years 16.90% 17.53% Since Inception (13th Mar 2006) 20.16% 21.16%
  7. Performance of Quantum Long Term Equity Value Fund – Direct

    Plan – Growth Option Period Current Value of 10,000 Invested at the beginning of a given period Benchmark* Additional Benchmark Benchmark* Additional Benchmark Scheme Returns (%) S&P BSE 200 TRI (%) S&P BSE Sensex TRI (%) Scheme (Rs) S&P BSE 200 TRI (Rs) S&P BSE Sensex TRI (Rs) 1 year 64.14% 58.77% 52.38% 16,414 15,877 15,238 3 years 11.56% 15.40% 15.32% 13,891 15,382 15,350 5 years 11.47% 15.63% 15.58% 17,217 20,678 20,639 7 years 10.98% 13.26% 12.35% 20,749 23,931 22,610 10 years 12.64% 12.95% 12.31% 32,925 33,831 31,950 Since Inception (13th Mar 2006) 13.85% 12.59% 12.42% 72,830 61,479 60,021 Past performance may or may not be sustained in the future. Load is not taken into consideration in scheme returns calculation. Data as of 30th June 2021 Different Plans shall have different expense structure. Returns are calculated on the basis of Compounded Annualized Growth Rate (CAGR). *with effect from February 01,2020 benchmark has been changed from S&P Sensex TRI to S&P BSE 200 TRI. As TRI data is not available since inception of the scheme, 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. For performance of other Schemes Managed by Mr. Sorbh Gupta please see slide number 21 and for performance of other Schemes Managed by Mr. Nilesh Shetty please see slide 21 The Scheme is co-managed by Mr. Sorbh Gupta and Mr. Nilesh Shetty. Mr. Sorbh Gupta is the Fund Manager effective from December 1, 2020. Mr. Nilesh Shetty is the Fund Manager effective from March 28, 2011.
  8. Performance of Quantum Nifty ETF Performance Period Current Value of

    10,000 Invested at the beginning of a given period Benchmark* Additional Benchmark Benchmark* Additional Benchmark Scheme Returns (%) NIFTY 50 TRI (%) S&P BSE Sensex TRI (%) Scheme (Rs) NIFTY 50 TRI (Rs) S&P BSE Sensex TRI (Rs) 1 year 54.34% 54.58% 52.38% 15,434 15,458 15,238 3 years 14.74% 15.00% 15.32% 15,117 15,220 15,350 5 years 14.80% 15.08% 15.58% 19,943 20,191 20,639 7 years 12.05% 12.30% 12.35% 22,185 22,532 22,610 10 years 11.90% 12.14% 12.31% 30,821 31,479 31,950 Since Inception (10th July 2008) 12.07% 12.13% 12.30% 43,923 44,193 45,089 Past performance may or may not be sustained in the future. Data as on 30th June 2021. Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). The Scheme being Exchange Traded Fund has one plan to invest through stock exchange and having a single expense structure. Income Distribution of Rs. 80 was declared on 9 March 2018. Scheme return calculated above is inclusive of Income Distribution amount. The Scheme is managed by Mr. Hitendra Parekh and he is managing this scheme since July 10, 2008.
  9. It is true that there are periods of time when

    Index Funds will do better than Active Funds
  10. Jan 2017: Global Issue Of Morningstar Magazine 

  11. Jan 2017: Active Management in India Had a Very High

    Success Rate  Source: Morningstar as of June 2016
  12. March 2021: Last Three Years Tough Time for Active Managers

      Source: Morningstar as of Mar 2021
  13. Active vs Passive: A Short Primer Active Investing Passive Investing

    Portfolio Created by AMC’s investment team based on research – Quality of research? Deep oversight. Portfolio Created by Benchmark creators based on liquidity, market capitalization (no oversight by Regulators) Expenses Cost of Research & Investment team, High distribution costs in Regular Plans Expenses Usually low cost as no need of research team, no distribution costs Risks Exposed to Performance Risk, Style risk of chosen fund Risks Zero flexibility in managing portfolio, have to own stocks irrespective of view on business and corporate governance Eg: Quantum Long Term Equity Value Fund Eg: Quantum Nifty Exchange Traded Fund
  14. Are Indian Benchmarks Active or Passive? Too Many Frequent Changes

    Defeats the Purpose of Low Costs No. of scrip replaced CY 03 CY 04 CY 05 CY 06 CY 07 CY 08 CY 09 CY 10 CY 11 CY 12 CY 13 CY 14 CY 15 CY 16 CY 17 CY 18 CY 19 CY 20 YTD 21 Dow Jones-30 0 3 0 0 0 3 2 0 0 2 3 0 1 0 1 1 1 3 1 Nifty-50 3 5 2 3 6 3 5 4 2 4 3 3 4 3 6 4 2 4 1 S&P BSE-30 5 2 2 1 2 3 2 3 2 2 2 0 3 1 3 3 4 2 0 S&P BSE-100 28 24 11 13 26 12 2 11 9 4 4 0 8 3 17 4 6 11 0 S&P BSE-200 50 51 16 28 60 26 3 30 16 16 29 12 21 14 17 27 15 13 1 Source: Bloomberg Finance L.P., As of May 2021
  15. What did John Bogle Think of Passive Investing in India?

    What has changed since then? Ajit’s Email to John Bogle, Founder of Vanguard, February 2010 While we have an ETF, we believe more in the actively managed style (we are value investors). This is because the indices in India are still immature and evolving. Typically, the index creators change between 10% and 20% of the stocks in an Index in any given year. The “losers” are taken out and the “surging stocks” are counted in. Of course, there is no transaction cost for such a move! But, if an ETF was to mirror this (and we have one, but with a 15 month track record), the real cost of mirroring the changes in the Index would lead to huge tracking errors over time. John Bogle’s response, Feb 2010 Hi, Ajit, I'm so sorry that I can't meet you. I'll be travelling all next week. For all the reasons I've expressed over the decades, I strongly prefer classic indexing over active management, even over "value" investing. But the indexing strategy you describe in India sounds just plain foolish. Good luck in your work! Best, Jack B
  16. Indian Benchmarks are not well constructed Concentration Risks can be

    High Stocks Top 5 Holding (Weight %) Reliance 10.01% HDFC Bank Ltd 9.59% Infosys Ltd 8.60% HDFC Ltd 6.55% ICICI Bank Ltd 6.41% Total of Top 5 41.16% Total of Top 10 58.53% Nifty 50 Stocks referred above are illustrative and not recommendation of Quantum Mutual Fund/AMC. The Fund may or may not have any present or future positions in these Stocks. The above information of stocks which is already available in publicly access media for information and illustrative purpose only and not an endorsement / views / opinion of Quantum Mutual Fund /AMC. The above information should not be constructed as research report or recommendation to buy or sell of any stocks. Source: Bloomberg Finance L.P., As of June 2021
  17. FY17 Till Date – Concentrated Rally in a Concentrated Index

    Stocks Top Contributors In Nifty Reliance 17.8% Infosys Ltd 13.5% HDFC Bank Ltd 12.6% ICICI Bank Ltd 8.9% TCS 7.6% Total of Top 5 60.2% Nifty 50 Factors Driving outperformance could create conditions for underperformance Stocks referred above are illustrative and not recommendation of Quantum Mutual Fund/AMC. The Fund may or may not have any present or future positions in these Stocks. The above information of stocks which is already available in publicly access media for information and illustrative purpose only and not an endorsement / views / opinion of Quantum Mutual Fund /AMC. The above information should not be constructed as research report or recommendation to buy or sell of any stocks. Source: Bloomberg Finance L.P., As of July 5, 2021
  18. Passive Investing – Has Quantum Changed its View Over the

    Last 13 Years? Passive Investing may not be the way to go at the moment Given the poorly constructed Indices, active management has an important role to play in an investors portfolio But its time will come As Index construction matures and market efficiency improves, outperformance by “active managers” will be difficult - Indexing will be the preferred way of investing When we believe Indexing is the way to go and “active management” has failed, we will be the first to let you know! We have the product ready – since 2008!
  19. Suggested Asset Allocation Strategy

  20. A Simple Asset Allocation Strategy for Equity Investors You can

    build your equity allocation by investing in just three funds This diversification has the potential to reduce downside risk in falling market while also helping you create long term wealth *Please note that the above suggested fund allocation only and is not to be considered as an investment advice/ recommendation, please seek independent professional advice and arrive at informed decision before making any investments
  21. Other Schemes managed by Sorbh Gupta and Nilesh Shetty Quantum

    Tax Saving Fund Mr. Sorbh Gupta is the Fund Manager effective from October 1, 2016. Past performance may or may not be sustained in the future. Data as of 30th June, 2021 #S&P BSE 200 TRI. With effect from February 01,2020 benchmark has been changed from S&P Sensex TRI to S&P BSE 200 TRI. Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). Different Plans shall have different expense structure. Mr. Sorbh Gupta co-manages 2 scheme of the Quantum Mutual Fund. Quantum Multi Asset Fund of Funds Mr. Chirag Mehta and Mr. Nilesh Shetty are Fund Managers effective from July 11, 2012. Period 1 year 3 years 5 years Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Quantum Multi Asset Fund of Funds*–Direct Plan (Gr) 16.51% 20.36% 9.51% 12.52% 8.99% 11.11% Quantum Multi Asset Fund of Funds*–Regular Plan (Gr) 16.11% 20.36% 9.24% 12.52% NA NA Past performance may or may not be sustained in the future. Load is not taken into consideration in Scheme Return Calculation. Data as of 30th June, 2021 #Benchmark has been changed from Crisil Composite Bond Fund Index (40%) + S&P BSE SENSEX Total Return Index (40%) + Domestic price of gold (20%) to CRISIL Composite Bond Fund Index (20%) + S&P BSE Total Return Index (40%) + CRISIL Liquid Index (25%) + Domestic Price of Gold (15%) with effective from April 01, 2021. It is a customized index and it is rebalanced daily Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). Different Plans shall have different expense structure. Mr. Chirag Mehta manages 5 schemes of the Quantum Mutual Fund. Mr. Nilesh Shetty manages 2 schemes of the Quantum Mutual Fund. Period 1 year 3 years 5 years Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Quantum Tax Saving Fund- Direct Plan (Gr) 63.17% 58.77% 11.63% 15.40% 11.60% 15.63% Quantum Tax Saving Fund- Regular Plan (Gr) 62.42% 58.77% 11.15% 15.40% N.A. N.A.
  22. Solutions to meet Sustainable Development Goals: SGD-17 SMILE was born

    out of our desire to support credible NGOs and create a steady stream of money flow for them Since 2018, Quantum MF investors have supported 7 NGOs from diverse sectors via the SMILE facility WHAT IS SMILE? THE SMILE STORY OUTCOME SO FAR SMILE enables Quantum MF investors to contribute 10% of their investment in eligible schemes to charities vetted by HelpYourNGO + = “SMILE”
  23. SMILE Process Flow Q Long Term Equity Value Fund Q

    Equity Fund of Funds Q Dynamic Bond Fund Q Multi Asset Fund of Funds Q Gold Savings Fund Q Liquid Fund Donated to NGOs selected by investors and vetted by HelpYourNGO HelpYourNGO sends donation receipts and 80G Liaises with NGO grantees Monitors & reviews INVEST IN SMILE FACILITY DONATE TO NGO’S DONATION RECEIPTS Investors receive periodic program reports from HYNGO on the NGOs supported by them Investors receive periodic program reports from HelpYourNGO on the NGOs supported by them * Q Stands for Quantum for scheme names
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  28. Disclaimer – Terms of Use The data in this presentation

    are meant for general reading purpose only and are not meant to serve as a professional guide/investment advice for the readers. This presentation 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 suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required as per SEBI Mutual Fund Regulations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. None of the Sponsors, the Investment Manager, the Trustee, their respective Directors, Employees, Affiliates or Representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the data/information/opinions contained in this presentation. The Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required. Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme 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 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. 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. 9th July 2021 Mutual fund investments are subject to market risks, read all scheme related documents carefully.
  29. Thank You 29