DSP Quant Fund

DSP Quant Fund has delivered SIP XIRR of 10.72% over 3Y and 11.33% over 5Y, but this trails the thematic category averages of 16.44% and 16.81% respectively by a wide margin of roughly 5-6 percentage points. The 1Y XIRR of 8.24% also lags the category's 11.75%, indicating persistent underperformance across time horizons. Lump-sum rolling returns are somewhat better, with the 5Y rolling mean at 13.43%, but the overall return profile remains below category peers.

The fund shows remarkably low drawdown characteristics, with a maximum drawdown of just -0.33% lasting 33 days and an average drawdown of only -0.06%, suggesting strong downside control typical of quant strategies. However, the Calmar Ratio of 0.41 over 5Y is modest, indicating that the low volatility has not translated into superior risk-adjusted returns. Three drawdown events exceeding 10% historically show the strategy is not immune to deeper corrections.

The portfolio is well diversified across 40 holdings, with the top position ITC at just 3.89% of NAV, reflecting the quant model's emphasis on broad diversification over concentrated bets. Sector allocation is led by Pharmaceuticals at 16.0% and IT-Software at 10.3%, with meaningful exposure to Automobiles, Telecom, and Finance. This multi-sector spread across FMCG, IT, metals, banks, and autos reduces single-sector risk but also dilutes thematic conviction.

The fund consistently underperforms its category across all measured periods, with the 7Y XIRR of 9.23% falling well short of the category average of 16.69%. Calendar year returns show volatility in consistency, ranging from 27.24% in 2021 to -10.97% in 2026, with negative years in 2022 and 2026. This persistent gap versus peers suggests the quant model has not kept pace with the broader thematic category.

This fund suits conservative investors seeking a low-drawdown, systematically managed equity allocation rather than maximum returns, given its notably smooth drawdown profile. A time horizon of 5-7 years is appropriate to allow the strategy to play out, though investors should accept below-category returns as the trade-off for lower volatility. Those prioritizing category-beating performance in the thematic space may find better alternatives.

• Exceptionally low maximum drawdown of -0.33% with a short 33-day drawdown duration, demonstrating strong downside protection
• Highly diversified portfolio of 40 stocks with no single holding above 3.89% of NAV, minimizing stock-specific risk
• Low expense ratio of 0.55% for a Direct plan, keeping cost drag minimal

• Significant underperformance versus category SIP XIRR across all horizons, with the 3Y XIRR of 10.72% trailing the category average of 16.44% by 5.72 percentage points
• Negative calendar year returns in 2026 (-10.97%) and 2022 (-7.94%) highlight inconsistency, and the modest Calmar Ratio of 0.41 over 5Y indicates weak risk-adjusted return generation