'Fully committed to cooperate': Quant Mutual Fund clarifies on 'front-running' report

The Securities and Exchange Board of India (Sebi) is reportedly probing Quant Mutual Fund for front-running. The investigation is part of Sebi's ongoing efforts to ensure market integrity and protect investors. 

Front running, a practice where managers buy securities for themselves before executing large orders for their clients, thereby driving up prices, is one of the key concerns being probed, according to a report by Moneycontrol.

Sebi officials reportedly conducted searches at the fund house’s offices, which manages around Rs 80,000 crore in assets. BT could not independently verify the report.

In response to the inquiries, Quant Mutual Fund issued a clarification to its investors late on Sunday. 

"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 cooperate 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."

The fund house assured its investors of its primary goal to deliver superior risk-adjusted returns.

Quant Mutual Fund has experienced significant growth in recent years, driven by retail inflows. Its assets under management surged from Rs 233 crore in March 2020 to Rs 80,470 crore presently. Known for its unique investment style based on analytics, the fund has rapidly expanded its market presence.

Founded by Sandeep Tandon, Quant Mutual Fund received its mutual fund license from Sebi in 2017. It has since become the fastest-growing mutual fund in the country, with assets increasing from around Rs 100 crore in 2019 to over Rs 90,000 crore currently. 

Quant Mutual Fund has a diverse portfolio covering large, mid, and small-cap stocks across various sectors. Their top holdings include Reliance Industries Ltd. (8.75% of AUM), Adani Power Ltd. (4.66%), and JIO Financial Services Ltd. (4.52%). The fund also holds significant shares in HDFC Bank Ltd. (3.11%), Aurobindo Pharma Ltd. (2.39%), and Tata Power Company Ltd. (2.36%).

Other notable holdings include Steel Authority Of India Ltd. (2.21%), Life Insurance Corporation of India (2.20%), and Samvardhana Motherson International Ltd. (2.06%). The portfolio is well-balanced with investments in companies like Britannia Industries Ltd., Jindal Steel & Power Ltd., and Container Corporation Of India Ltd.

Quant MF's small-cap holdings feature companies such as IRB Infrastructure Developers Ltd. and Aegis Logistics Ltd., while mid-cap investments include names like HFCL Ltd. and Poonawalla Fincorp Ltd.