Quant MF probe: No need for panic redemption, advise experts

Experts have a mixed opinion on the likely impact of the probe in investors’ wealth.
Quant MF probe: No need for panic redemption, advise experts

MUMBAI: Amid reports of Sebi probe against Quant Mutual Fund for alleged front running, investors are in a stress over the safety of their investments. Making things worse is that a majority of shares of the companies in which Quant MF has invested declined for the second consecutive day on Tuesday, despite the market indices closing at new record peaks.

However, experts have a mixed opinion on the likely impact of the probe in investors’ wealth. As per reports, Sebi has conducted searches at the Mumbai office of Quant founded by Sandeep Tandon in the midst of global financial crisis of 2007-08. The fund house has, however, said it has only received inquiries from the the market watchdog.

Quant Mutual Fund has an asset under management (AUM) of Rs 93,000 crore across 8 million folios. The fund house boasts of some of the best performing funds in their respective categories such as Quant large and Mid Cap, Quant Mid Cap, Quant Small Cap and Quant ELSS Taxsaver Fund.

Jeevan Kumar KC, head of investment advisory at Geojit Financial Services, told the TNIE from Kochi that the ongoing probe into the front running allegations against Quant is likely to create a negative sentiment among its investors and we can expect redemptions in Quant schemes.

“Those who are planning to invest lump sum in Quant schemes can consider investing in the same category schemes of other prominent fund houses, while those investing in SIPs can continue their investments, if they are able to withstand the present volatility,” Kumar said.

Himanshu Srivastava, associate director at Morningstar India, doesn’t see any wider impact on the market.

“The Quant incident is an isolated case specific to one fund house and reflects its particular investment practices. It is not indicative of overall functioning of the funds industry, or practices followed by other funds,” Srivastava said in a note.

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