Explained: How quant funds eliminate fund manager subjectivity

Currently, most funds in this category have a short track record

ICICI Prudential Mutual Fund (MF) is the latest player to enter the nascent category of quant funds. Its new fund offer will end on December 7. 

The other three existing players are: Nippon India, whose fund is the oldest; DSP, whose fund has the largest corpus (Rs 447 crore); and Tata, which was launched in January this year.  

Just as food can be classified based on its nutrients, stocks, too, can be categorised based on their risk-return characteristics, called factors. 

Some of the key ones are quality, growth, value, and momentum. By doing a back-testing, fund houses develop models that allow them to