The Kotak Quant Fund has marked its third anniversary, delivering a compounded annual growth rate (CAGR) of over 16% since its 2023 launch. The fund has outperformed its benchmark, the Nifty 200 TRI. While the performance is notable, investors should understand the fund's rule-based quantitative strategy and its very high risk profile before making investment decisions.
The Kotak Quant Fund has officially completed its three-year milestone, having launched in August 2023. Since its inception, the fund has recorded a compounded annual growth rate (CAGR) of approximately 16.21%. This return has outpaced its primary benchmark, the Nifty 200 TRI, which delivered roughly 12.4% over the same period, highlighting the impact of the fund's specific stock-selection approach.
How The Fund Selects Stocks
Unlike traditional mutual funds where managers pick stocks based on personal research or company visits, this fund uses a quantitative model. The strategy relies on a rule-based system to screen a wide universe of stocks—typically ranging from 800 to 1,000 companies—down to a more focused portfolio. The model evaluates stocks based on six key parameters, including liquidity, price momentum, and volatility, alongside fundamental financial data like Return on Equity (ROE) and net profit margins.
As of June 30, 2026, the fund managed assets worth approximately ₹498 crore. The investment team managing the portfolio includes Abhishek Bisen, Harsha Upadhyaya, and Rohit Tandon. Because the strategy is driven by an automated model, the fund's performance depends heavily on the model's ability to interpret market data effectively across different economic cycles.
Understanding The Risks
While the fund's track record is strong, it is classified as a very high-risk investment. Investors should consider several factors before deciding to invest. Quantitative models are designed to work under specific market conditions, and their effectiveness can change during periods of extreme market volatility or unusual shifts in sector leadership.
Concentration risk is another factor to monitor, as rule-based models may sometimes build significant positions in specific sectors or stocks that meet the model's criteria, which could lead to losses if those specific areas face a downturn. Additionally, there is a financial cost for short-term exits; the fund charges an exit load of 0.5% if investors redeem their units within 90 days of purchase.
The difference between lump sum returns and systematic investment plan (SIP) returns is also worth noting for investors. Due to the staggered nature of SIP investments, the returns on those plans may differ from the fund's point-to-point CAGR. Investors should continue to monitor the fund's performance consistency and evaluate whether the quantitative approach fits their long-term financial goals and tolerance for market fluctuations.