What is a Fund of Fund?
- It is a mutual fund investing in schemes of other mutual funds
- It uses its expertise in identifying schemes and fund houses for investments
- The expertise reduces the risk of wrong selection of funds
- It reduces the hassle of making multiple investments
- It is a one-stop solution for your investment requirements
A FUND OF FUNDS can invest in funds focusing on any asset class - equity, debt or
What is the Quantum Equity Fund of Fund?
Quantum Equity FUND OF FUNDS is an Equity oriented mutual Fund of Funds scheme.
The fund accentuates on investing in 5-10 diversified equity schemes of third party
mutual funds. The investments are based on the recommendations provided by Quantum
Information Services (QIS) - PersonalFN, following proprietary quantitative and
qualitative selection criteria.
Is there any entry and exit load?
No, there is no entry load for making investments in Quantum Equity Fund of Funds.
However, an exit load of 1.5% will be charged if the investments are redeemed within
1 year from the date of investment.
What are the benefits of investing in a Fund of Funds scheme?
- To reduce manager selection risk - which fund house to choose?
- To reduce scheme selection risk - which equity scheme to choose?
- To benefit from proven research expertise and risk control
- To get exposure to the best performing funds
- To get exposure to diverse fund management styles
- To smartly use the ‘No-Entry’ Load direct investment route
- To invest without ‘bias’ - fund house bias, distributor bias
- To accumulate all your equity holdings and get a consolidated reporting
By investing in a Fund of Funds, you do not need the services of a financial advisor
whose advice could at times be biased, unsuitable and expensive
Why should I use a Fund of Funds to invest in Equities?
As there are over 375 equity schemes, investors often face difficulty in deciding
which scheme to invest in. The myriad schemes and plans available makes the investment
decision extremely difficult.
Also, how do you ensure that the selected funds will perform well? Data as on August
31, 2010 shows that in a 3 year time frame - 66 out of 135 diversified equity funds
(with existence over 3 years) gave below average return. So the chances of an investor
selecting a poor performing fund is very high.
If you do not have the time and/ or the inclination to select STOCKS - Invest in
MUTUAL FUNDS. If you do not have the time and/ or the inclination to select MUTUAL
FUNDS -Invest in Fund of Funds.
How the fund selects the underlying schemes?
Quantum Equity Fund of Fund follows a comprehensive research methodology for selecting
the schemes. The research methodology comprises of both, quantitative and qualitative
Quantitative analysis - Under quantitative analysis, the focus
is on the performance of the schemes across time frames and market cycles. In addition
to it, the schemes are evaluated based on the stock concentration levels in their
portfolios, and also on the risk-adjusted returns front.
Qualitative analysis - The qualitative parameters largely judge
the fund on the parameters like fund house’s investment systems and processes, the
performance of the scheme across market cycles, consistency in characteristics of
its portfolio among others.
Funds that emerge as the top performers on both the above parameters form part of
the final portfolio.
The Fund also constantly reviews its investments and carries out necessary re-balancing
to ensure superior consistent performance
What are the risks of investing in a Fund of Funds?
There are few risks which are associated with Fund of Funds.
- The risk of selecting a bad fund in the Fund of Funds portfolio. This can have an
adverse impact on the performance of the fund.
- Given Fund of Funds invests in other mutual fund schemes, they carry all the risk
associated with the investments made by underlying mutual fund schemes.
- Geographical classification
- Given Fund of Funds are related to the markets (equity, debt among others), any
change in the market conditions will have an impact on its performance.
What is the expense ratio for the Quantum Equity Fund of Funds?
Investments in Quantum Equity Fund of Funds would entail investors to pay an Expense
Ratio of 0.75% p.a. This is over and above the expense ratio charged by the underlying
mutual fund schemes which would be accounted in the NAV
Can this impact be negated?
Yes, to an extent. You can invest into Quantum Equity Fund of Funds with No
- Entry Load. And the fund would make its investments into other schemes
on a No - Entry Load basis.
As an investor, if you would have invested in the equity funds through a distributor,
you would have paid an advisory fee of upto 2.5% on each of your investments.
So, by investing in the Quantum Equity Fund of Funds - you get the expert selection
of the best funds at the same time you save on the Entry Loads.
What are the tax implications?
The tax implications on Fund of Funds are same as that of debt mutual funds (even
if they invest in equity-oriented funds).
How to invest?
- Investing Offline/ Physical way
- Investors can download the Application form, complete it and send it to any of the
collection centres along with the cheque / demand draft of the requisite amount.
- Investing Online
- We also offer an online investing option. Investors can invest at any time at their
convenience on the internet.
- Visit www.Quantumamc.com and click on the ‘Invest Online’ link
- First time users can click on the link to create your user ID
- Once you have created your user id and set your password, please send an attested
copy of your PAN card along with your user ID and contact number to the Karvy Hyderabad
office. (You can also send it to us or the nearest collection centre. Sending it
to Karvy, Hyderabad will help cut down the process time)
- Within 24 hours of receipt at the Karvy Hyderabad office, your account will be activated
and you will receive an email stating the same.
Click here to view list of Investment centres
What are the investment details?
(Re-opened for continuous subscription from 22-July-09)
Entry Load - NIL
Exit Load - 1.5% within 1 Year
Investment Amount |
Rs 5,000 and in Multiples of Re. 1 |
Rs 1,000 and in Multiples of Re. 1
Rs 1,000 and in Multiples of Re. 1
Dividend - Payout and Re-Investment
Systematic Investment Plan (SIP)
Available after re-opening Minimum 6 for Rs 1,000 each
Systematic Transfer Plan (STP)
Click here to download Application form and KIM