After the Lotus India Agile fund, it is now Reliance’s turn to come out with a ‘quant’ fund for retail investors in India: Reliance Capital to offer quant fund in April:

Reliance Capital Asset Management Ltd will convert its index fund into a quant fund with effect from April 18, the firm said in a notice on Monday.

Reliance Index Fund will give way to Reliance Quant Plus Fund that will invest at least 90% of the assets in an actively managed portfolio of 11 to 15 stocks from S&P CNX Nifty index on the basis of a mathematical model.

I can’t find more information about the fund yet, but it seems that - just like the Lotus fund - this one is also a long-only, cash only (no F&O), mid/large cap fund.

As for the Lotus Agile Fund:

India’s only quant fund from Lotus India Asset Management is down about 28% so far this year, data from fund tracking firm ICRA Online Ltd showed.

Compare that to the Nifty-50 which is down 27% since January 1, 2008. Of course, you would have paid additional fees/loads for the privilege of losing an extra percentage point in the Lotus fund.

Don’t say you weren’t warned - here is my take on the Lotus Agile Fund, written back in November 2007: Quant funds in India, Lotus Agile fund & Ever-changing cycles

. . . given that the September-October period saw a very sharp mo-mo rally - something that occurs probably once in four years - I think a momentum-based long-only large-cap quant fund may be a bit off in terms of timing.

. . . if we were to enter a bear market, they can’t switch to a short-only strategy. While they do claim to beat the Nifty-50 index since 1997 (including bear markets), it does not matter to me as an investor - what I am interested in are absolute (positive) returns, not relative (less negative) returns!

While these funds are nowhere close to using the complex quantitative strategies & systems employed by global hedge funds, it warms my heart to see ‘quant’ approaches gain mind-share in India. And with Reliance entering the fray, I hope to see some serious marketing spend on this front!