Quant Mutual fund overview
Mutual fund investors who have invested in Quant Mutual Fund panicked when the Security and Exchange Board of India initiated a probe against AMC Quant mutual fund charges of front running. SEBI has identified that the trading behaviours of the inventors of this mutual fund have shown some front-running activities. The Front-Running method is a prohibited strategy for fund management. This is due to the exploitation of advanced knowledge of significant trades to profit from price fluctuations. This practice comes under unethical market fairness and investors’ trust. Therefore, the regulatory bodies strictly monitor such activities and penalize such form activities performed by any investor or a form.
The buzz of Quant Mutual Fund is going on because the Quant Mutual Fund company has stratified investments in leading stocks such as Reliance, Jio Finance Services, Adani Power, Tata Power, and Aurobindo Pharma. The fund’s portfolio is combined with high-quality stocks. Everything in their operations was normal till the unforeseen market disturbance showed disturbance due to external influences. Last year, Quant Mutual Fund showed a rise of over 250% in its assets under management; the amount under the company stood at Rs 84,000 crores at the end of May. Many of the company’s schemes yield bumper returns for the investor. The AUM of the mutual fund 225 crores in May 2019.
Chaos on Investor
The investors in Quant funds have taken out Rs.1,400 crore in 3 days. The redemption of investment is highly individual-driven and depends on multiple factors for each investor. The ideal approach for the existing investors is to choose a more stable mutual fund. Long-term investors have performed some diversified steps, such as SIPs/STPs, which can protect their assets from any form of fraudulent activity. Investors who are searching to liquidate investments in the very near term have availed themselves of the prudent risk related to switching between pure equity funds managed by different fund managers.
The Quant Mutual Fund has remained on the topper in different durations across the equity platforms. The Quant Small Cap Mutual Fund has delivered impressive returns over the last five years. These funds have delivered about 495% of the absolute returns from the overall investments on the quant mutual funds.
In comparison, the Quant Mid Cap fund has offered 348% returns in this time frame. With the increase of such returns from the Quants investment plans, SEBI has mentioned that they are only investing in the “Quant Mutual Fund”. There is no judgment that has passed on from running. So, it would be no worries for know for the investors in the Quant Mutual Funds; they can safely invest and take out their assets from the mutual fund services of Quant.
Impact of Quant Mutual Fund’s NAV Due to Front-Running
The investment practices on Quant have applied different approaches rather than focusing on the fund manager’s discretion, and the investment body has followed quantitative investing methods. However, the Quant Mutual Funds front-running case is not the first one in the mutual fund sectors. The Axis Mutual Fund and HDFC Mutual Funds have already faced these cases. In the scenario of Axis Mutual Funds, SEBI took action against Axis Mutual Fund by barring the fund’s dealer with 20 more areas.
In comparison, the HDFC mutual fund case was reported in 2007. The Net Asset Value of the Quant Mutual Funds has shown a decline of over 0.25% on the breakage of front-running practices. The Healthcare Funds of the Quant Mutual Fund are also affected by 0.25%. In comparison, the Quaint Small Cap Fund has shown a decline of 0.52% from its net asset value.
