The Qode Growth Fund delivered exceptional performance in Q4FY26, outperforming its benchmark by over 14 percentage points during one of the steepest small-cap corrections in recent history. According to The Economic Times, the fund returned -0.20% for Q4 compared to -14.36% for its benchmark, while on a one-year basis, the fund returned +7.13% versus -5.40% for the Nifty Smallcap 250. The fund also ranked #1 across all equity PMS strategies in India for the month of March 2026, returning +1.34% in a month where the small-cap universe fell over 10%. This performance comes amid broader market challenges, with Indian equity markets having fallen by around 13% since September due to a slowdown in corporate earnings growth and significant withdrawal of foreign investments.
Fund Manager Rishabh Nahar explained that the fund follows a multi-factor approach combining quality, growth, and value, with the portfolio built at the intersection of Quality and Value at all times. As reported by The Economic Times, the fund's current portfolio has a PEG of 0.64x with 31.37% earnings growth against a forward PE of 20.09x, compared to large-caps trading at a forward PE of roughly 29.71x with TTM earnings growth of just 11.12%. The fund's proprietary factor analysis showed that Value was the only major factor that held up during the correction, declining just 3.84% versus losses of 11 to 16% across other factors. Nahar emphasizes that quant investing isn't about secret algorithms, but rather first-principles approach with disciplined risk management and selective risk-taking for consistent outperformance, particularly during volatile or bearish phases.
The fund's systematic derivatives overlay contributed significantly to its resilience during the market correction. According to The Economic Times, the options overlay contributed +11.08% over one month and +17.92% over three months during Q4, directly offsetting the equity-level drawdown during the sharpest phase of the sell-off. The fund maintains approximately 89% equity exposure and 11% cash, with the cash component representing profits from options positions yet to be redeployed alongside standard buffer for ongoing options activity. This combination of quality-oriented stock selection and systematic derivatives hedge produced the asymmetric outcome seen in Q4, with the fund's disciplined approach focusing on consistent outperformance during volatile market conditions.
The fund maintains 30 holdings as a deliberate choice rather than a constraint, with each position selected through a quantitative multi-factor model that screens for quality of earnings, valuation attractiveness, and growth sustainability. As reported by The Economic Times, the fund recommends a minimum investment horizon of three to five years and ideally longer, noting that small-cap investing requires patience to sit through periods of valuation compression. The fund's current positioning reflects conviction in small-cap quality, with the Relative Valuation Gradient at 92 indicating some of the most compelling relative entry points for smaller companies in several years. This approach has proven particularly effective during market downturns, with the fund's systematic risk management framework helping navigate the current correction phase.
