Quantum Ethical Fund: Your Path to Principled Returns

One does not have to choose between doing good and doing well. Rather than chasing fleeting returns, choose to invest in a way that offers consistent, responsible returns. Choose ethical investing to grow your wealth and stay true to what matters most to you.

At Quantum group, we incorporated the Integrity screen into our investment framework more than 25 years ago in 1996. The integrity screen is a filter that helps us weed out companies with questionable business and governance practices. This filter mitigates risks related to stakeholders and regulations and ensures long-term business sustainability and protection of minority shareholder rights. This focus on governance and integrity is at the core of Quantum’s portfolio construction across its equity schemes, and their risk adjusted, dependable performance over the years is a testimony to the robustness of this exercise.

Building further on this proprietary framework, we proudly announce the launch of our New Fund Offering - Quantum Ethical Fund. The Investment Objective of the fund is to achieve long-term capital appreciation by investing in businesses meeting an ethical set of principles including Shariah, Jainism and other ethical principles encompassing a broad ethical framework.

The Quantum Ethical Fund offers investing in businesses where ethical practices drive long term performance. The fund will benchmark its performance to the NIFTY 500 Shariah Total Return Index.

Past performance may or may not be sustained in the future.
Source: NSE Data as on October 31, 2024 # QTD, YTD and 1year returns are absolute returns.
Returns for greater than one year are CAGR returns.*Average daily standard deviation annualised

This track record indicates that investing with ethics does not mean that one has to compromise on returns. Returns from businesses with ethical practices also tend to be less volatile.

The portfolio construction process of the Quantum Ethical Fund -

Start with considering market liquidity and only companies with an average trading volume of $ 1 million per day for last 12 months will become part of the addressable universe.

Next, companies which do not fall under Shariah, Jainism and ethical principles will be excluded. Some examples of these include businesses related to alcohol, tobacco, narcotics, animal cruelty, animal testing, gambling, film and media production and distribution, and mainstream financial services. In line with certain ethical considerations, financial screening will ensure that portfolio companies have Interest-based debt less than 25% of total assets and Interest income less than 4% of total income.

Then an integrity score based on qualitative and quantitative research will be determined and stocks that have a positive integrity score will be subjected to a financial assessment to ensure they are financially sound before being included in the portfolio.

The final portfolio will include 30 to 50 stocks diversified across sectors with sector weights being based on a broad India equity index. Weight of a stock will depend on the integrity score with minimum and maximum weight of 1% and 5% on cost basis and a maximum weight of 10% on market value basis. The portfolio will be periodically reviewed to ensure it always stays true to its principles.

The Quantum Ethical Fund is an Equity Fund It is suitable for investors who have a long-term investment horizon for more than 3 years. The NFO is open for subscription from December 02 to December 16, 2024. The minimum investment amount is Rs 500.

At Quantum, business integrity forms the core of our investment philosophy and our track record exhibits how we have integrated this with our investment acumen. So, if you choose to prosper with principles, Quantum can be a reliable partner to do it with.

Name of the Scheme	This product is suitable for investors who are seeking*	Riskometer of scheme
Quantum Ethical Fund An open-ended equity scheme following an Ethical Theme	• Long term capital appreciation • Investments in Equity & Equity Related Instruments of companies following an Ethical Set of Principles

^*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

#The product labeling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made. The same shall be updated on an ongoing basis in accordance with clause 17.4 of the SEBI Master Circular on Mutual Funds dated June 27, 2024.

Above article is authored by Quantum.

View All