Quant Mutual Fund, SEBI and Front Running

SEBI has initiated an inquiry and investigation against Quant Mutual Fund, and the allegation is suspected front running.

So, let’s understand first, what is front running?

Front running is considered to be an illegal practice where fund managers, place personal orders, before executing large trade to profit from expected price changes.

The portfolio of Quant Mutual Fund consists of Reliance Industries Limited, Tata Power, Adani Power, LIC, Jio Financial Services Limited, TCS etc.

On receiving inquiry from SEBI, Fund house said, “recently, Quant Mutual Fund has received inquiries from Sebi, and we want to address any concerns you may have regarding this matter”. “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,”.

It’s very important to know that Quant Mutual Fund, is one of the fastest growing fund houses in the country with over 80 lac folios approx. and Rs. 93000 Crore+ assets under its management.

Pankaj Mathpal, Founder & CEO at Optima Money Managers advises investors, to remain invested and continue investing in SIP mode. He 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.”

So from the above these points can be drawn for investors’ concern

  1. Situation: allegation is suspected front running.
  2. Expected Impact: Minimal as the portfolio of the fund house if of quality stocks, and the individual stocks prices have a very less chances to get affected from the SEBI’s investigation, so the NAV may remain unaffected due to this probe as NAV is influenced by market performance.
  3. What can be done: Investors may choose to remain invested as the portfolio is diversified, so calmness of investor may play a very important role in this. But investors must apply their discretion while taking any decision.
  4. What Quant is going to do: Fund house assured SEBI that they will extent full cooperation with the investigation, maintaining a commitment to transparency and integrity.

Where it’s quite unfortunate that we hear news related to insider trading, front running and many other mal practices related to the market, but these are not enough to break the confidence of Indian investors as there is SEBI comes into picture to bring out the truth and to restore the confidence.

Anupam Jaiswal
Anupam Jaiswal
Anupam Jaiswal is a Certified professional, corporate trainer, motivational speaker and a business coach. He is the founder of Multiple ventures including AJ Leadership academy and Shrie Campus LLP. Anupam is having 20+ years of a rich experience of working with corporate, institutions and government bodies. He also acted as a CS and compliance office in a Mumbai based listed company and headed ICSI, Lucknow chapter as secretary and chairman. and now in whole time practice, and consultants to corporate including Success My Business.

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