Quant Mutual Fund reduces exposure to frontline IT stocks as part of profit-booking exercise

Quant Mutual Fund has pruned its exposure to frontline information technology (IT) stocks as part of a profit-booking exercise, while increasing its allocation to FMCG companies, according to the monthly release by the fund house.

In October, the fund house increased exposure to IT services as the fund house believed that the segment was entering what it described as “neglected territory”.

In its November release, the fund house said it remains relatively underweight on manufacturing companies due to uncertainties surrounding input costs and supply chains.


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The fund house also highlighted that its portfolio construction focuses on stocks that are under-owned, under-researched, undervalued and neglected by the market. The fund house added that it continues to remain constructive on sectors and themes such as energy, large infrastructure, select non-banking financial companies (NBFCs), asset management companies (AMCs), auto ancillaries, hotels, pharmaceuticals, telecom and data centres.

Highlighting the importance of active portfolio management amid changing market conditions, Quant Mutual Fund said investors need to remain agile with their portfolio allocation. The fund house said that, “In such times when large global indices such as crude, and even stock market indices of entire countries such as Taiwan and South Korea behave like nano-cap stocks, it is important to stay agile in one’s own portfolio and allocation.”

It added that its multi-asset, multi-manager structure allows it to act swiftly and capture opportunities across different asset classes under various market scenarios.

The fund house also highlighted the growing uncertainty around the global artificial intelligence (AI) trade. In October, a major sell-off hit Wall Street, with the PHLX Semiconductor Index declining nearly 15% and the Nasdaq 100 falling around 4.2% in the last three trading sessions of the month.

Quant Mutual Fund attributed the sudden decline to underwhelming corporate earnings from major technology companies, including Amazon, Alphabet and Meta. It said institutional investors were moving away from pure software plays amid concerns over an overextended AI trade, with capital rotating towards defensive, high-quality equities and the physical infrastructure supporting AI, including data centre power infrastructure, transformers, grids and cooling systems.

On the domestic market outlook, Quant Mutual Fund said India remained relatively resilient despite concerns around AI and its impact on the broader global economy. The fund house said it believes the coming decade belongs to India and that global capital will continue to find the country an attractive investment destination.

It also pointed to opportunities in areas that are currently outside crowded investment themes. Quant Mutual Fund said its behavioural analytics had been helping identify opportunities in the anti-AI trade, adding that India, in general, was positioned away from the crowded AI trade of 2026.

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The fund house reiterated that markets, investment cycles and opportunities keep changing, making a dynamic approach to money management important for investors.

In October, the fund house launched its three maiden index funds - Quant Nifty 50 Index Fund, Quant Nifty 100 Index Fund, and Quant Nifty Midcap 150 Index Fund and these three funds are positioned for investors seeking a simple, transparent and long-term way to participate across key segments of India’s equity market, either individually or as part of a complete passive portfolio allocation.

“Our endeavor is to actively time the launch of these passive products with the bottom of the market, as we believe that the worst is behind us,” the fund house said.

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