Quant MF looks beyond large caps for alpha, adds IT services and stays cautious on manufacturing

According to fresh market updates, Quant Mutual Fund is looking beyond the large-cap segment for incremental opportunities, while positioning its portfolios towards under-owned and relatively neglected parts of the market.

In its September 2026 factsheet, the fund house stated it anticipates market consolidation to increasingly take hold in large-cap and blue-chip stocks. Against this backdrop, it believes alpha generation could come from bottom-up, stock-specific opportunities in the micro-, small- and mid-cap segments.

For market participants, the more relevant part of the commentary is how the AMC is translating that view into its portfolios.

Quant stated its portfolio construction is at present focused on stocks that are “under-owned, under-researched, under-valued and neglected”. At the same time, it stays relatively underweight manufacturing firms because of uncertainty surrounding input costs and supply chains.

IT services move back into focus

One of the more notable shifts is towards IT services.

The AMC stated it has increased exposure to IT services firms as these stocks moved into what it describes as “neglected territory”. This is important because it comes at a time when its broader commentary additionally points to opportunities arising away from some of the most crowded global market themes.

Quant stated it keeps stay constructive on energy, large infrastructure, select non-banking financial firms, asset management firms, auto ancillaries, hotels, pharmaceuticals, telecom and data-centre themes.

The positioning, that stated, is not uniform across every scheme. Different funds have been making fairly sharp sector-level changes depending on their mandate.

For instance, Quant Small Cap Fund increased its exposure to healthcare and telecom during August, while reducing power, capital goods and metals.

Quant Mid Cap Fund, in the meantime, boosted exposure to healthcare, capital goods and auto, while cutting financial services and IT. The AMC stated mid-caps are at present in a favourable phase supported by improving fundamentals.

What should market participants take away?

For market participants, the September commentary is less around picking one sector over another and more around understanding how actively managed portfolios can change as market conditions change.

Quant's current positioning suggests three broad themes.

First, the AMC sees fewer easy, broad-based opportunities in large caps and anticipates stock selection to matter more, particularly further down the market-cap spectrum.

Second, it is willing to move towards sectors that have lost investor attention, as noted in its increased exposure to IT services.

Third, the AMC is not chasing every structural theme uniformly. Its relative caution on manufacturing, despite the sector's long-term expansion narrative, reveals that valuation, input costs and supply-chain risks keep influence portfolio decisions.

The fund house additionally reiterated that its investment approach stays dynamic rather than buy-and-hold, with portfolio allocations adjusted as valuation, liquidity and risk conditions change.

For existing market participants, these changes are as a result useful mainly as a window into how their fund is being positioned, rather than as standalone signals to enter or exit a sector.