Quant Mutual Fund says investors should stay agile in portfolio allocation amid market shifts
The fund house noted that the geopolitical crisis in the Middle East had entered its eighth month and resulted in severe disruptions to global commodity supplies, with Brent crude rising above $100 a barrel. The persistent energy shock also stalled the multi-year global disinflation process, while higher diesel, jet fuel and natural gas prices put pressure on household savings and trade balances in energy-importing countries.
The US Federal Reserve’s 25-basis-point rate hike added to the uncertainty. Quant Mutual Fund said tighter monetary conditions were pushing sovereign bond yields to multi-decade highs, while US 30-year fixed mortgage rates had crossed 7%. According to the fund house, higher borrowing costs could suppress consumer spending, cool the housing market and restrain business investment, raising the risk of a stagflation-like environment.
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Against this backdrop, global investors have been readjusting their portfolios as higher borrowing costs put pressure on corporate profit margins and consumer real incomes. Equity markets also witnessed a correction in September, with the Nifty 50 falling 6%, while the Hang Seng and Shanghai indices declined around 3.5%. The Indian rupee also moved towards 96 against the US dollar.
Quant Mutual Fund also highlighted the changing dynamics around artificial intelligence. While the AI boom has supported manufacturing activity in countries such as Japan, South Korea and Taiwan through strong semiconductor and AI hardware demand, the fund house said India’s relatively lower exposure to AI and dependence on high-ticket imports such as oil and gold had affected broader market sentiment.
The fund house said that since April 2026, AI-related activity and investment had become increasingly pervasive. Quant Mutual Fund’s Behavioral Analytics, it said, has identified opportunities in what it describes as the “anti-AI trade”. The fund house believes India, being away from the crowded AI trade, is positioned to benefit from this shift.Quant Mutual Fund said such an environment reinforces the importance of remaining flexible with portfolio and asset allocation. “It is important to stay agile in one’s own portfolio and allocation,” the fund house said, highlighting the sharp movements in commodities and even country-level equity indices.
The fund house said this is where its dynamic and active money management approach comes into play. Its multi-asset, multi-manager structure, according to Quant Mutual Fund, allows it to take swift action and seek opportunities across a broad range of asset classes under different market scenarios.
In terms of portfolio construction, Quant Mutual Fund said it is focused on under-owned, under-researched, under-valued and neglected stocks. The fund house said it remained relatively underweight on manufacturing because of uncertainty around input costs and supply chains, while increasing exposure to IT services as the segment was entering what it described as “neglected territory”.
Quant Mutual Fund said it remained constructive on Energy, large Infrastructure, select NBFCs, AMCs, Auto Ancillaries, Hotels, Pharmaceuticals, Telecom and data centre themes.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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