Quant Mutual Fund: What investors should do after Sebi’s action to probe front-running?

  • Quant Mutual Fund Sebi news: The market regulator has initiated investigations against the mutual fund, suspecting it of front-running. MF experts, however, have a different take on the impact of such actions.

Asit Manohar
First Published24 Jun 2024, 03:03 PM IST
As Quant Mutual Fund has invested in quality stocks like Reldani Power, Tata Power, SAIL, LIC, etc., chances of any fall in NAV due to SEBI's action are negligible, say experts.
As Quant Mutual Fund has invested in quality stocks like Reldani Power, Tata Power, SAIL, LIC, etc., chances of any fall in NAV due to SEBI’s action are negligible, say experts.(HT_PRINT)

Quant Mutual Fund Sebi news: India's fastest-growing mutual fund is currently under investigation by the Securities and Exchange Board of India (Sebi) for suspected front-running, an illegal practice wherein fund managers place their own orders before executing large trades to profit from the anticipated price movement. 

This Quant Mutual Fund news might have sparked concerns among investors about the safety of their investments. 

However, mutual fund experts say the Sebi's investigation might have little impact on them, given the fund's exposure to quality stocks. They said that mutual funds' performance hinges on the market. As Quant Mutual Fund has invested in quality stocks including Reliance, Jio Financial Services, HDFC Bank, Adani Power, Tata Power, SAIL, LIC, and Aurobindo Pharma, chances of any fall in the net asset value (NAV) due to the Sebi action are negligible.

Quant Mutual Fund's investment strategy

Reacting to the news of Sebi's investigation into Quant Mutual Fund, Kartik Jhaveri, a seasoned professional with extensive experience in wealth management as the director at Transcend Capital, provided a reassuring perspective. He said such investigations had been carried out earlier as well, hinting that such a move was unlikely to affect the prospects of MF invetsors.

"This is not the first time a fund manager has been scrutinised by Sebi for front-running. Therefore, investors should not be unduly concerned about such investigations. Their investments are secure as mutual funds have diversified their portfolios with stocks, and a mutual fund's NAV price is influenced by market performance. Hence, this investigation is unlikely to impact the performance of Quant Mutual Fund."

Quant Mutual Fund invested stocks

"The mutual fund has invested in leading stocks like Reliance Industries Limited (RIL), Jio Financial Services Ltd, Adani Power, Tata Power, SAIL, LIC, TCS, etc. None of these stocks will be affected even when the SEBI's investigation comes true. So, Quant Mutual Fund investors are advised to remain invested and continue investing if they are investing in the SIP mode," said Pankaj Mathpal, Founder & CEO at Optima Money Managers. 
Mathpal explained, “The Net Asset Value (NAV) of a mutual fund is the value of its assets minus its liabilities. It is the price at which investors buy and sell units of the mutual fund. The NAV is influenced by the performance of the stocks in the fund's portfolio, not by external factors like SEBI investigations.”

Quant Mutual Fund clarification

After Sebi's investigation news on front-running, Quant Mutual Fund issued a strong and unequivocal clarification, saying Quant was fully committed to cooperating with the regulator on the probe.

"We want to assure you that Quant Mutual Fund is a regulated entity, and we are always fully committed to cooperating with the regulator throughout any review. We will provide all necessary support and continue to furnish data to Sebi on a regular and as-needed basis, demonstrating our unwavering commitment to transparency and integrity."

What is front-running?

Front-running is an illegal practice in which fund managers, dealers, or brokers who are aware of upcoming large trades, place their own orders before the trade to profit from the anticipated price movement when the trade is executed.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:24 Jun 2024, 03:03 PM IST
HomeMoneyPersonal FinanceQuant Mutual Fund: What investors should do after Sebi’s action to probe front-running?

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