Active vs Passive

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Active vs Passive Investing - A Quantum
Perspective
Speakers Mr. Nilesh Shetty, Fund Manager
Equities July 9th 2021
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In 2008, 13 Years Ago, QMF launched Quantum Nifty
ETF A low-cost method to participate in the
stock markets
Quantum Nifty ETF
650 600 550 500 450 N 400 A V 350 300 250 200 150
100 50
Quantum Nifty ETF SP BSE Sensex TRI Nifty 50 TRI
(Base 100, as on 10th July 2008)
10-Jul-08
30-Jun-21
Period
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.
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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?
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Its not because we dont want you to have
low-cost solutions its 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
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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.
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QLTEVF vs QNIFTY ETF
Comparing QLTEVF QNIFTY ETF Risk Since Inception
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
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.
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Performance of Quantum Long Term Equity Value
Fund Direct Plan Growth Option
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.
Period Current Value of 10,000 Invested at the beginning of a given period Current Value of 10,000 Invested at the beginning of a given period Current Value of 10,000 Invested at the beginning of a given period
Period Benchmark Additional Benchmark Benchmark Additional Benchmark
Period Scheme Returns () SP BSE 200 TRI () SP BSE Sensex TRI () Scheme (Rs) SP BSE 200 TRI (Rs) SP 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 SP Sensex TRI to
SP BSE 200 TRI. As TRI data is not available
since inception of the scheme, benchmark
performance is calculated using composite CAGR
SP 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
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Performance of Quantum Nifty ETF Performance
The Scheme is managed by Mr. Hitendra Parekh and
he is managing this scheme since July 10, 2008.
Period Current Value of 10,000 Invested at the beginning of a given period Current Value of 10,000 Invested at the beginning of a given period Current Value of 10,000 Invested at the beginning of a given period
Period Benchmark Additional Benchmark Benchmark Additional Benchmark
Period Scheme Returns () NIFTY 50 TRI () SP BSE Sensex TRI () Scheme (Rs) NIFTY 50 TRI (Rs) SP 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.
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It is true that there are periods of time when
Index Funds will do better than Active Funds
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Jan 2017 Global Issue Of Morningstar Magazine ?
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Jan 2017 Active Management in India Had a Very
High Success Rate ?
Source Morningstar as of June 2016
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March 2021 Last Three Years Tough Time for
Active Managers ? ?
Source Morningstar as of Mar 2021
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Active vs Passive A Short Primer
Active Investing Passive Investing
Portfolio Created by AMCs 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
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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
SP BSE-30 5 2 2 1 2 3 2 3 2 2 2 0 3 1 3 3 4 2 0
SP BSE-100 28 24 11 13 26 12 2 11 9 4 4 0 8 3 17 4 6 11 0
SP 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
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What did John Bogle Think of Passive Investing in
India?
What has changed since then? Ajits 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 Bogles 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
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Indian Benchmarks are not well constructed
Concentration Risks can be High Nifty 50
Stocks Top 5 Holding
Stocks (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
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
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FY17 Till Date Concentrated Rally in a
Concentrated Index
Factors Driving outperformance could create
conditions for underperformance Nifty 50
Stocks Top Contributors
Stocks 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
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
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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!
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Suggested Asset Allocation Strategy
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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
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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.
Period 1 year 1 year 3 years 3 years 5 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.
Past performance may or may not be sustained in
the future. Data as of 30th June, 2021 SP BSE
200 TRI. With effect from February 01,2020
benchmark has been changed from SP Sensex TRI to
SP 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 1 year 3 years 3 years 5 years 5 years
Scheme Returns () Benchmark Returns () Scheme Returns () Benchmark Returns () Scheme Returns () Benchmark Returns ()
Quantum Multi Asset Fund of FundsDirect Plan (Gr) 16.51 20.36 9.51 12.52 8.99 11.11
Quantum Multi Asset Fund of FundsRegular 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) SP BSE
SENSEX Total Return Index (40) Domestic price
of gold (20) to CRISIL Composite Bond Fund Index
(20) SP 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.
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Solutions to meet Sustainable Development Goals
SGD-17
SMILE
WHAT IS SMILE?
THE SMILE STORY
OUTCOME SO FAR
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
SMILE enables Quantum MF investors to contribute
10 of their investment in eligible schemes to
charities vetted by HelpYourNGO
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SMILE Process Flow
DONATION RECEIPTS HelpYourNGO sends donation
receipts and 80G Liaises with NGO grantees
Monitors reviews
DONATE TO NGOS
INVEST IN SMILE FACILITY 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
Q Stands for Quantum for scheme names
Investors receive periodic program reports from
HelpYourNGO on the NGOs supported by them
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Product Label
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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.
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