Quant Small Cap just bought 5 new stocks. Do you own any?

Let's find out which stocks it bought and sold in July

Quant Small Cap just bought 5 new stocks. Do you own any? Adobe Stock

Summary: Last month alone, Quant Small Cap added five fresh stocks, increased stakes in two big names and made swift exits elsewhere. The moves reveal where the fund sees its next big winners. Are any of them in your portfolio?

Quant Small Cap Fund has quickly climbed the ranks to become the fourth-largest mutual fund scheme in India, with assets under management (AUM) now close to Rs 30,000 crore.

The buzz isn’t without reason. Sure, the past year has been rough, but over the last five years the fund has delivered an annualised return of 37.21 per cent, enough to turn a lump sum investment of Rs 1 lakh into around Rs 6.7 lakh. Yes, that’s a 7x jump in just five years. Meanwhile, a Rs 10,000-a-month SIP would have grown to Rs 11.4 lakh in the same period.

The secret sauce? VLRT. Instead of relying on gut feeling, this four-star-rated fund uses a data-driven approach called VLRT:

Valuations – Spotting when a stock is cheap compared to its real worth.
Liquidity – Tracking where money is flowing across markets and asset classes.
Risk Appetite – Gauging whether investors are chasing risks or playing it safe.
Timing – Understanding market cycles to act when the other three factors align.

This strategy allows Quant Small Cap to chase high-growth opportunities quickly, and move out just as fast when momentum fades.

As a result, the fund changes around 70 per cent of its portfolio every year. In some years, that’s been over 100 per cent, meaning it’s replaced every stock in its portfolio more than once in 12 months.

So, given the hustle-bustle investing ethos of the fund, let’s look at what the fund was buying just last month

The fresh five picks last month

Marathon Nextgen Realty – 8.13 per cent stake, worth 1.32 per cent of the fund’s overall portfolio.
Aditya Birla Lifestyle Brands – A brand-new entry into retail and fashion, worth about 1.57 per cent of its investors’ money.
Capri Global Capital – Bought a 2.95 per cent stake.
Gland Pharma – Small but strategic bet at 0.38 per cent stake in the company.
Anthem Biosciences – A 0.66 per cent stake.

The fund increased allocations in two big names

Jio Financial Services – From 0.88 per cent to 0.95 per cent stake, now comprising a hefty 6.76 per cent of Quant Small Cap Fund’s overall portfolio.
Anand Rathi Wealth – Stake up from 2.68 per cent to 3.1 per cent, which translates to 2.3 per cent of its portfolio.

Cutbacks and exits

Exited – Chambal Fertilisers and Chemicals.
Reduced – HP Adhesives and Onesource Specialty Pharma

What investors should keep in mind
Because the fund hunts momentum, it can be volatile, and recent months have been proof, falling way harder (-6 per cent returns) than its average peer (-2.2 per cent) in the last 12 months. Additionally, its standard deviation (a measure of how much returns swing) is 17.19 per cent, slightly higher than the small-cap category average of 16.96 per cent. In simple terms: expect more ups and downs.

So, is Quant Small Cap Fund worth adding to your portfolio?
In Value Research Fund Advisor, our Analyst’s Choice section highlights small-cap funds that have not only shone in good years but also stood firm in tough markets.