With the recent markdown that has hit several schemes, it only reaffirms that our investment philosophy is on the right track by not investing in Private Corporate Credit Instruments. Right from its inception, Quantum Liquid Fund (QLF) had an offer document driven mandate of investing 80% of its assets in the highest quality instruments.
We follow the SLR investment philosophy ( Safety, Liquidity and Returns) for managing the fixed income funds at Quantum.
We realized that achieving all three - high safety, high liquidity and high returns is not easy.
The investment objective of a liquid fund is to keep your investment safe and liquid and try and achieve slightly higher returns than bank savings deposits.
Thus, liquid funds’ portfolios should have very high liquidity, minimum volatility and near zero chances of capital loss (credit risk - risk of default of interest and principal).
Quantum Liquid Fund prioritizes Safety and Liquidity over Returns.
The Quantum Liquid Fund has invested only in Government Securities, Treasury Bills and Commercial Paper/ Certificate of Deposits issued by AAA rated PSU entities. (Public Sector Undertakings).
The fund thus hopes to mitigate the issue of credit risks (risk of default) and liquidity risks (unable to liquidate/sell the assets to meet redemptions) by investing in safer and more liquid instruments.
Therefore while the returns that the Quantum Liquid Fund generates may be lower than its peers, the risk that the Fund takes is also lesser.
Quantum Liquid Fund also follows an industry-leading practice of completely marking to market (MTM) its entire liquid fund portfolio in keeping with SEBI’s mandate of fair valuation of securities. This ensures that the NAV of the fund is more closely linked to the actual realizable market value of the assets.
We disclose our portfolios of Quantum Liquid Fund on a weekly basis enhancing transparency,
use the below-mentioned link to peruse the portfolios and know more about the fund.