Quant Mutual Fund Investigation: Should Investors Pause Their SIPs or Withdraw Funds?

Mutual fund investors have long favored Quant Mutual Schemes, not just for their appealing name, but due to their consistent outperformance. Take, for instance, the Quant Small Cap Fund, which has been surpassing the BSE 250 Smallcap TRI and the average returns of small-cap funds on a year-to-date (YTD) basis, as well as over the last 1-year, 3-year, and 5-year periods.

However, this success story took an unexpected turn with a recent investigation by the Securities and Exchange Board of India (SEBI). The probe into Quant Mutual Fund, a high-growth asset management company managing Rs 93,000 crore in assets, revolves around alleged front-running activities.

Understanding Front-Running

Front-running is an unethical practice where insiders or brokers trade based on advanced knowledge of pending mutual fund transactions. By making personal trades before the fund’s transactions, these individuals can profit from the anticipated price movements, which ultimately harms the fund’s investors by giving the insiders an unfair advantage.

Should Investors Be Concerned?

The SEBI investigation has understandably made investors anxious about their Systematic Investment Plans (SIPs) or other investments in Quant Mutual Fund. However, one should not stop their SIPs. 

Investors with a longer-term horizon, including those with ongoing SIPs or Systematic Transfer Plans (STPs), are encouraged to continue holding their investments. The potential to weather short-term volatility and benefit from future recovery remains intact.

Quant Mutual Fund: A Rising Star

Founded by Sandeep Tandon, Quant Mutual Fund has quickly become one of the fastest-growing mutual fund entities in India. SEBI granted the fund house approval to enter the mutual fund business in 2017. Since then, it has demonstrated remarkable growth, surpassing assets worth Rs 50,000 crore by January and now offering 26 schemes to 54 lakh folios.

Quant Mutual Fund’s assets under management (AUM) have surged from Rs 233 crore in March 2020 to an impressive Rs 80,030 crore. This growth is largely driven by retail investor inflows. Sandeep Tandon, with over 25 years of experience in the financial services sector, plays a pivotal role in overseeing investment decisions for 22 schemes within Quant Mutual Fund, steering the organization towards continued success and growth.

In conclusion, while the SEBI probe might raise concerns, experts suggest that investors maintain their SIPs and trust in the long-term potential of their investments with Quant Mutual Fund.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.