Falling From Grace

On June 24, Sebi launched a probe into Quant MF over alleged front-running activities. What happens to the investments? Should one hold or fold?

- NAVNEET DUBEY

QUANT MUTUAL FUND'S (MF) growth trajectory has been nothing short of remarkable, with its assets under management (AUM) shooting up by a staggering 250.76% in just a year. The fund's AUM stood at ₹23,956 crore in May 2023, but by May 2024, it surged to a substantial ₹84,030 crore. But now, a shadow of suspicion looms over this skyrocketing growth.

Sandeep Tandon, the CEO and Director of Quant MF is under scrutiny from the Securities and Exchange Board of India (Sebi) for suspected front-running. This development raises a crucial question for every investor: Are their investments at risk?

"If the allegations of front-running are proven true, it could lead to volatility in the stocks Quant MF holds or has traded in recently. Investors might temporarily lose confidence in these stocks, affecting their prices. However, it's crucial to note that this is a temporary situation," says Amit Goel, Co-founder and Chief Global Strategist at asset management company Pace 360.

As of June 2024, the company's shareholding pattern reveals it holds over 179 stocks, with Quant MF being the sole fund house that has invested in 17 unique companies that other asset management companies have avoided.

FRONT-RUNNING VS INSIDER TRADING