Midcap picks by quant-driven mutual fund algorithms

Quant-based mutual funds combine the benefits of both active and passive funds by utilising computer algorithms to select stocks. Currently, 10 equity mutual fund schemes use these advanced algorithms. The stock selection process relies on various filters set by fund houses, which include macroeconomic, fundamental, and technical factors like volume, volatility, liquidity, value, and momentum.

For instance, DSP Quant Fund builds its portfolio based on growth, quality, and value parameters. At the same time, Nippon India Quant Fund focuses on factors such as valuation, earnings, price momentum, and quality.

Key midcap stocks selected

Quant-based mutual fund schemes focus on midcap stocks, which are chosen based on the Association of Mutual Funds in India (AMFI) classification. Due to their growth potential, these stocks are considered promising for online mutual fund investment. The portfolio data is updated as of 31 August 2024.

Key takeaways

• Quant mutual funds use algorithms to select stocks, offering a blend of active and passive fund benefits.
• DSP and Nippon India Quant Funds are examples that use different stock-picking criteria.
• Midcap stocks, classified by AMFI, are favoured in these portfolios, making them attractive options for online mutual fund investment.