Quant PMS Funds Surge as Data-Driven Investing Gains Favour Among HNIs

Quantitative and factor-based portfolio management services (PMS) are witnessing strong traction in India, as more high-net-worth individuals (HNIs) shift towards data-backed and algorithmic investment strategies to outperform traditional benchmarks.

Nearly half of all new PMS strategies introduced this year adhere to quantitative or factor-based models, according to PMS AIF World's October 2025 report. This represents a substantial departure from the manager-driven, discretionary methods that have hitherto dominated India's wealth management market.

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The All Weather Growth and Tactical Funds from Qode Advisors, ArthAlpha Machine Learning Quant PMS, and Elever Adviser FactorCore PMS are among the five quant-oriented new PMS schemes that were released in 2025. To find market opportunities, these tactics include algorithmic models, momentum indicators, and methodical data analytics.

Rapid Shift Toward Algorithmic Investing

Just over a year ago, PMS launches labelled as “quant” were almost non-existent. But the latest disclosures show that India’s wealthy investors are now increasingly trusting structured data models over human intuition. Analysts say this reflects a broader trend in global investing, where quant-based strategies have gradually moved from institutional investors to mainstream adoption.

Performance data supports this shift. Over the last six months, quant PMS strategies have delivered returns ranging from 10% to 17%, outperforming key benchmarks such as the BSE 500 TRI (7.19%) and the Nifty 50 TRI (5.53%) during the same period. In contrast, several non-quant peers — such as MoneyGrow PMS and Dynamic Equities Bluechip PMS — have reported flat or even negative returns, highlighting the growing resilience of systematic models in volatile markets.

Rising Acceptance, Modest but Steady AUM Growth

While discretionary multi-cap and small-cap PMS funds still dominate the total assets under management (AUM) landscape, quant-driven strategies are quickly expanding their footprint. Since 2024, these models have accounted for 40–50% of all new PMS launches, underscoring rising HNI confidence in algorithmic investing.

Collectively, new quant PMS funds such as Qode Advisors’ All Weather and Tactical models, Capitalmind SmartCore, and ArthAlpha Quant PMS now manage assets worth around Rs 160 crore — averaging Rs 40 crore per scheme. Though still smaller than the Rs 80 crore average AUM for discretionary peers, this marks a sharp rise from the sub-Rs 15 crore levels seen at launch, reflecting growing investor interest in data-led decision-making.

AI and Data Analytics Power the Next Growth Phase

Experts believe India’s expanding digital infrastructure — from Aadhaar and UPI systems to corporate financial databases — is providing the ideal foundation for quantitative investing. These data streams enable predictive factor modelling and AI-driven analytics, helping fund managers reduce behavioural biases and maintain portfolio discipline.

Industry strategists view this surge in quant PMS adoption as similar to the “quant renaissance” witnessed in the US during the early 2010s, when data-driven factor models such as momentum, quality, and low-volatility outperformed traditional discretionary funds for nearly a decade.

Conclusion

As automation, AI, and data analytics continue to shape investment management, quant PMS funds appear poised to play a defining role in India’s next phase of wealth creation. Their rise reflects not just a change in investor preference, but a fundamental transformation in how financial decisions are made — shifting from instinct to intelligence.