Quantitative funds, also known as “quant funds,” are investment vehicles that use computer algorithms and other quantitative techniques to identify and trade stocks. They are often used to diversify portfolios, as they can expose investors to a wide range of assets and industries and may produce returns that are not correlated with those of more traditional asset classes like equities and bonds. Many SEBI Registered Investment advisors consider these types of funds along with other options or suggest such funds; some advisors even suggest portfolios of stocks that implement a quantitative model themselves.

One reason why quant funds may be a good option for diversifying a portfolio during times of market volatility is that they often rely on mathematical models to evaluate risk and make investment decisions. This can help reduce the impact of emotional or behavioural biases that can lead to subpar investment decisions during times of market stress. In addition, quantitative funds may be a source of steady returns, as they seek to identify and capitalize on patterns and trends in the market using statistical and mathematical techniques.

However, it is important to note that quant funds are not without risk. Like all investments, they are subject to market fluctuations and may lose value due to changes in market conditions.

Continue reading this on the Jama Wealth Insights blog – Risks associated with Quant funds