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The Maverick Fund House

Quantum Mutual Fund has walked on the road less taken

Quantum Mutual Fund took pleasure in being the maverick. And, in all fairness, it has had courage to walk the unbeaten path.

It is the only fund house that refuses to pay distributor commissions, and this at a time when SEBI did not give investors the option of going directly to the AMC to bypass the entry load. You paid the load whether you went directly or through the distributor.

It also does not resort to advertising. Which is probably why Quantum Long-Term Equity Fund collected just Rs 11 crore at launch.

It does not end there. This AMC refuses to increase its AUM by frequent NFO launches. As a result, it offers just four funds: a gold ETF, an index fund, an equity fund and a cash fund. Two were launched in 2006 and two in 2008.

Going by its principles, it is little wonder that it is one of the smallest fund houses with just Rs 69.43 crore.

If one is to believe Ajit Dayal, a director with the AMC, that mutual funds should be bought and not sold, then the fund house must rely solely on performance. And the AMC has yet to make a mark in this front.

The performance of its equity fund was way below the average last year but has handled the current slump very well. Its portfolio in September was also quite different from that of its peers, with a higher-than-average allocation to technology, financial services, energy and services. Its liquid fund is an above average performer with a 3-star rating.

Explanation of the data tables and graphs

This review appeared in the October 2008 Issue of Mutual Fund Insight.