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Quant small cap fund removes HDFC Bank from its top 10 holdings; reduces more than 5% stake
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3 min read | Updated on August 07, 2024, 23:14 IST
SUMMARY
Quant Small Cap Fund's AUM rose by 6.80% from June to July 2024. Significant changes included a reduction in top holdings allocation and a notable removal of HDFC Bank Ltd. The fund increased its cash allocation, signalling cautious market sentiment.
Quant Small Cap Fund removes HDFC Bank from its top 10 holdings; reduces more than 5% stake
The Quant Small Cap Fund focuses on investing primarily in small-cap stocks and is designed for long-term investors, with a portfolio that includes both medium-term and long-term investments. The fund is composed largely of high-growth companies with appealing valuations and is relatively under-owned. The scheme (regular plan- growth) was launched on November 24, 1996.
From June 30, 2024, to July 31, 2024, the assets under management of Quant Small Cap Fund reached to the ₹24,530 crore from ₹22,967 crore, respectively. It is a 6.80% increase in the AUM within a month.
The scheme has delivered 13.50% CAGR returns since its inception and 52.32% in a year. The fund tracks BSE 250 SmallCap TRI as its benchmark and has an expense ratio of 1.62%. From March 24, 2020, to July 31, 2024, the scheme delivered an absolute return of 940.86%, maintaining a portfolio beta of 1.10 (as per factsheet).
In June 2024, the Quant Small Cap Fund's top 10 holdings had an allocation of 46.03% of the portfolio which decreased to 42.19% in July 2024. The portfolio is predominantly allocated to small caps at 66.33%, with large caps at 18.49% and mid-caps at 2.27% in July 2024.
Earlier there was a higher allocation to large caps at 31.30% and a lower allocation to mid-caps at 0.38% in June 2024. This change indicates a sign of caution taken by the fund manager in the initial stages of geopolitical tensions.
Changes in Top 10 Portfolio Holdings
| Securities | June 2024 Top 10 Holdings (%) | July 2024 Top 10 Holdings (%) | % Change |
|---|---|---|---|
| Reliance Industries Ltd. | 10.63 | 9.57 | -1.06 |
| HDFC Bank Ltd. | 7.27 | Removed from Top 10 Holdings | - |
| Jio Financial Services Ltd. | 5.68 | 4.88 | -0.8 |
| Aegis Logistics Ltd. | 3.57 | 4.46 | 0.89 |
| Bikaji Foods International Ltd. | 3.51 | 3.28 | -0.23 |
| Adani Power Ltd. | 3.44 | 3.3 | -0.14 |
| IRB Infrastructure Developers Ltd. | 3.43 | Removed from Top 10 Holdings | - |
| Housing & Urban Development Corporation Ltd. | 3.26 | Removed from Top 10 Holdings | - |
| RBL Bank Ltd. | 2.78 | 2.6 | -0.18 |
| National Aluminium Co. Ltd. | 2.47 | 2.27 | -0.2 |
| Aditya Birla Fashion and Retail Ltd. | - | 4.13 | 4.13 |
| HFCL Ltd. | - | 4.04 | 4.04 |
| Sun TV Network Ltd. | - | 3.65 | 3.65 |
In July 2024, the Quant Small Cap Fund reduced the allocation to its top 10 holdings where Reliance Industries Ltd reduced from 10.63% to 9.57%, while Jio Financial Services Ltd also decreased from 5.68% to 4.88%. HDFC Bank Ltd has been removed from the top 10 holdings of the portfolio reducing the stake from 7.27% on June 30, 2024, and new additions included Aditya Birla Fashion and Retail Ltd, HFCL Ltd, and Sun TV Network Ltd. The percentage allocated to Aegis Logistics Ltd. increased from 3.57% to 4.46%. The removal of HDFC Bank Ltd from the holding is a notable thing in this portfolio change.
Looking at the asset allocation the Equity & Equity Related Instruments decreased from 98.17% to 87.09%. Consequently, the share of Money Market Instruments and cash rose from 1.83% to 12.91% which is significant.
Conclusion
The removal of HDFC Bank Ltd and increased cash levels reflect a strategic shift in the Quant Small Cap Fund's approach amid market uncertainties.
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