India’s fastest-growing mutual fund, Quant Mutual Fund, is currently under scrutiny by the Securities and Exchange Board of India (SEBI) for suspected front-running practices. Front-running involves placing personal orders ahead of large trades to capitalize on anticipated price movements, which is illegal. This development has raised concerns among investors about the safety of their investments.
Despite the investigation, mutual fund experts believe that the impact on investors might be minimal due to Quant Mutual Fund’s robust investment strategy focused on quality stocks. Notable holdings include Reliance Industries, Jio Financial Services, HDFC Bank, Adani Power, Tata Power, SAIL, LIC, and Aurobindo Pharma, which are considered resilient against external regulatory actions.
Experts reassured investors, pointing out that SEBI has previously investigated similar cases without significant repercussions for investors. They emphasized that mutual fund performance primarily hinges on market conditions rather than regulatory issues. Therefore, it is advised investors to remain confident in their investments despite the ongoing investigation, highlighting that the Net Asset Value (NAV) of a mutual fund is driven by the performance of its underlying assets, not by external factors like regulatory inquiries. It is recommended that investors stay invested, especially those using the SIP mode for regular investments.
Quant Mutual Fund has responded to the investigation with a commitment to cooperate fully with SEBI. They affirmed their adherence to regulatory standards and pledged transparency throughout the review process.
Front-running, defined as placing personal orders ahead of large trades, remains prohibited due to its potential to exploit market movements unfairly.
Disclaimer: Investors are advised to consult certified experts before making any investment decisions.
