UTI AMC’s Sharwan Goyal sees quant strategies reshaping India’s equity markets

Sharwan Goyal of UTI AMC says quant strategies are transforming India’s equity markets with data-driven, adaptive multi-factor investing. By Anshul Sharwan Goyal, Fund Manager and Head – Passive, Arbitrage and Quant Strategies at UTI AMC, believes quantitative investment strategies are influencing India’s equity markets by offering a systematic, data-driven alternative to traditional discretionary approaches. Goyal explained that conventional investing has historically relied on fund managers’ judgment and fundamental analysis. Quant strategies, by contrast, use rule-based algorithms to analyse large datasets, detect patterns, and generate predictive insights. ALSO READ | US Supreme Court's tariff decision: How the stock market may move "Quant strategies provide a structured, consistent investment approach that complements traditional frameworks and offers investors an additional pathway to build resilient portfolios,” he said. At UTI AMC, the approach follows a dynamic multi-factor framework. The team rotates across fundamental factors such as Quality and Value, alongside market-driven factors like Momentum and Low Volatility. The firm tracks around 470 companies across large-cap, mid-cap, and small-cap segments, integrating deep fundamental research with market signals. Goyal used a football analogy to explain factor rotation: just as a coach adjusts formations based on the opponent and match situation, the fund adjusts factor exposures based on historic performance trends. Pro-cyclical factors like Momentum and Value tend to perform well during strong, sustained market rallies, while counter-cyclical factors such as Quality and Low Volatility provide resilience in turbulent periods. To identify medium-term trends, UTI AMC relies on decision tree models—including a Quality-Value indicator and a Momentum–Low Volatility indicator—which help gauge historical patterns and determine factor weights dynamically. This ensures that portfolios remain adaptive, diversified, and aligned with prevailing market regimes. According to Goyal, market conditions significantly influence quant fund performance. Models perform best in steady, trend-driven markets where factor relationships are intact and market noise is low. However, robust frameworks that integrate multiple factors, adapt to market regimes, and include risk controls can navigate volatile conditions more effectively. Both institutional and retail investors are showing interest in quant-based mutual funds, he noted, as the disciplined, rule-based methodology provides diversification benefits relative to traditional discretionary strategies. Goyal cautioned that managing quant funds in India requires attention to liquidity, portfolio turnover, and market volatility, since higher turnover and alternative portfolio construction can lead to periods of deviation from broad market benchmarks. ALSO READ | PB Fintech shares rise over 2% following Kotak Institutional Equities upgrade Note To Readers Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.