Your Anchor in a Storm - Grow your Wealth with a Value + Tax Advantage

The financial markets have been through a bumpy ride the past year – the Russia-Ukraine war has led to a global energy crisis and led to rising inflation and subsequent interest rate hikes. Just like an anchor helps you remain steadfast during a storm, choosing to be in a diversified portfolio can safeguard your portfolio from downside risk

By investing in three asset classes using Quantum’s tried and tested 12:20:80 (Barah, Bees aur Assi) Asset Allocation Strategy, you get the right mix of security, stability and growth in your portfolio.

Equity – Your growth block, forms the largest part of the allocation. However, it is important that within this block, you invest in a diversified equity portfolio as different styles do well during different market cycles. Post-2020, due to cyclical recovery, value investing has made a comeback. Thoughtful investors can stay the course by adding value funds as part of their well-crafted diversified bouquet of funds.

Adding VALUE to the Mix

Given the rising interest rates, the cost of borrowing would also increase, impacting profitability and thereby equity returns. However, interest rate hikes do not negatively impact all equity investments uniformly. Each style of investing has its pros and cons. Finding the correct mix of value and growth funds may lead to enhanced diversification and better potential to beat downside risks arising out of interest rate hikes.

The table above indicates how the equity-gold portion of the 12:20:80 Portfolio would have performed with or without value against the benchmark. This substantiates how the presence of a value fund helps lower portfolio downturns. The potential for risk-adjusted returns increases over the long term.

Why does it make sense to add a Value-oriented ELSS fund to your portfolio?

Considering it’s time when companies ask for investment proof from employees, it’s a good opportunity to grow your wealth with a value-based ELSS fund.

Add Quantum Tax Saving – a-true-to-label value-based ELSS fund as a part of your diversified equity allocation using our tried and tested 12:20:80 Asset Allocation Strategy (Barah, Bees Aur Assi).

Quantum Tax Saving Fund is managed in the identical style as our Quantum Long Term Equity Value Fund. It consists of a well-balanced and diversified portfolio - typically 25 to 40 stocks, selected after a thorough bottom-up stock selection.

• Sensibly Valued - When you consider Quantum Tax Saving Fund in your portfolio, you get a comparable earning potential as the benchmark at relatively lower valuations. (Ref Fig 2 below)

• Liquidity Filter - You are invested in a scheme portfolio screened with a liquidity filter of companies trading over $1 Million per day, so you never have to worry about the flexibility to redeem on reaching your goals

• Integrity Filter – The portfolio invests in companies that are selected based on their governance standards. Companies with poor governance will not be included in the portfolio no matter their weight in the benchmark.

• Stress-tested for Resilience – The underlying stocks go through a stress test for balance sheet strength thereby reducing risks in case of downturns.

• Poised to grow with India’s economic recovery upcycle - The scheme portfolio is diversified and poised to grow with India's economic recovery. (Ref Fig 3)

• Low portfolio churn – The Fund Managers of QTSF invest with a long-term perspective and don’t deviate from the stated style. It has a portfolio turnover ratio of 18.48% as of September 30, 2022, translating to an average holding period of 5.4 years.

• Saffron line is the predicted NAV based on the forecasted upside (Two years prior)

• The Blue line is the actual Fund NAV

• Barring black swan events, forecasted upside potential over the next two years has closely tracked the actual fund performance over the long term. The trend is indicative of a robust investment process that has worked over the long term.

Investing in an ELSS has its share of advantages: -

• Tax benefit u/s 80C allows you to save up to Rs.46,800 per year, considering you are in the highest tax bracket.

• It has the lowest lock-in among other tax saving options.

• You can invest using an SIP or lumpsum mode,

Undoubtedly, adding a Value-based ELSS Fund to your diversified equity portfolio is the way forward to help you create wealth, reduce risk of downside and save tax in the process. Try using our Asset Allocation Calculator to rebalance your equity allocation.

Irrespective of the macroeconomic challenges, add value investments as part of your diversified equity portfolio to sail through every market environment. Get started on your tax + wealth building goals with Quantum Tax Saving Fund.

#S&P BSE 500 TRI, ##S&P BSE 200 TRI, ###S&P BSE Sensex.

Data as of November 30, 2022.

Past performance may or may not be sustained in the future.

Load is not taken into consideration in scheme returns calculation.

Different Plans shall have a different expense structure.

Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR).

#with effect from December 01, 2021 Tier 1 benchmark has been updated as S&P BSE 500 TRI. As TRI data is not available since inception of the scheme, benchmark performance is calculated using composite CAGR S&P BSE 500 index PRI Value from March 13, 2006 to July 31, 2006 and TRI Value since August 1, 2006.

##TRI data is not available since inception of the scheme, Tier 2 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

The Fund is managed by George Thomas & Christy Mathai. George Thomas has been managing the fund since April 1, 2022. Christy Mathai has been managing the fund since November 30, 2022.

Click here to view other funds managed by them.

#S&P BSE 200 TRI, ##S&P BSE Sensex TRI.

Data as of November 30, 2022.

Past performance may or may not be sustained in the future.

Load is not taken into consideration in scheme returns calculation. Different Plans shall have a different expense structure.

Returns are net of total expenses and are calculated based on Compounded Annualized Growth Rate (CAGR). The fund is managed by

Chirag Mehta since Nov 1, 2013. Chirag Mehta manages 5 Schemes of Quantum Mutual Fund.

For other schemes managed by him, please Click here.

#NIFTY100 ESG TRI, ##S&P BSE Sensex TRI.

Data as of November 30, 2022.

Past performance may or may not be sustained in the future.

Different Plans shall have a different expense structure. Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). Chirag Mehta manages 5 Schemes and Sneha Joshi manages 1 scheme of the Quantum Mutual Fund. For performance of other funds managed by Chirag Mehta, please Click here.

#Domestic Price of Physical Gold.

Data as of November 30, 2022.

Past performance may or may not be sustained in the future.

Different Plans shall have a different expense structure.

The fund is managed by Mr. Chirag Mehta. Chirag Mehta is handing the fund since May 19, 2011. For other funds managed by Chirag Mehta, please Click here.

Name of the Scheme	This product is suitable for investors who are seeking*	Riskometer of scheme	Tier-1 Benchmark	Tier-2 Benchmark
Quantum Tax Saving Fund An Open Ended Equity Linked Saving Scheme with a Statutory Lock in of 3 years and Tax Benefit	• Long term capital appreciation • Invests primarily in equity and equity related securities of companies in S&P BSE 200 index and to save tax u/s 80 C of the Income Tax Act. Investments in this product are subject to lock in period of 3 years	Investors understand that their principal will be at Very High Risk

Name of the Scheme	This product is suitable for investors who are seeking*	Riskometer of scheme	Riskometer of Benchmark
Quantum Equity Fund of Funds An Open Ended Fund of Funds scheme Investing in Open Ended Diversified Equity Schemes of Mutual Funds	• Long term capital appreciation • Investments in portfolio of open-ended diversified equity schemes of mutual funds registered with SEBI whose underlying investments are in equity and equity related securities of diversified companies	Investors understand that their principal will be at Very High Risk
Quantum India ESG Equity Fund An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme	• Long term capital appreciation • Invests in shares of companies that meet Quantum's Environment, Social, Governance (ESG) criteria.	Investors understand that their principal will be at Very High Risk
Quantum Gold Savings Fund An Open Ended Fund of Fund Scheme Investing in Quantum Gold Fund	• Long term returns • Investments in units of Quantum Gold Fund – Exchange Traded Fund whose underlying investments are in physical gold	Investors understand that their principal will be at High Risk

Name of the Scheme	This product is suitable for investors who are seeking*	Riskometer of scheme
Quantum Long Term Equity Value Fund An Open Ended Equity Scheme following a Value Investment Strategy. Primary Benchmark: S&P BSE 500 TRI	• Long term capital appreciation • Invests primarily in equity and equity related securities of companies in S&P BSE 200 index	Investors understand that their principal will be at Very High Risk

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

The investors of Quantum Equity Fund of Funds, Quantum Gold Savings Fund, Quantum Nifty 50 ETF Fund of Fund will bear the Scheme expenses in addition to the expenses of other schemes in which Fund of Funds scheme makes investment (subject to regulatory limits).

Above article is authored by Quantum.

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