Quant Mutual Fund, India’s fastest-growing mutual fund, is currently under investigation by the Securities and Exchange Board of India (SEBI) for suspected front-running. This illegal practice involves fund managers placing personal orders before executing large trades to profit from the expected price changes.

While this news might worry investors about the safety of their investments, mutual fund experts believe the SEBI investigation will have minimal impact.

They point out that Quant Mutual Fund’s performance depends largely on market conditions and its investments in high-quality stocks such as Reliance, Jio Financial Services, HDFC Bank, Adani Power, Tata Power, SAIL, LIC, and Aurobindo Pharma. Therefore, the risk of a significant drop in the net asset value (NAV) due to SEBI’s action is negligible.

In response to SEBI’s investigation into Quant Mutual Fund, Kartik Jhaveri, director at Transcend Capital and an experienced wealth management professional, offered a reassuring viewpoint.

He noted that such investigations have occurred previously and are unlikely to affect mutual fund investors’ prospects. Jhaveri explained that this is not the first instance of a fund manager being scrutinized for front-running, so investors should not be overly worried.

Their investments remain secure due to the diversified nature of mutual fund portfolios and the fact that a fund’s NAV is driven by overall market performance. Therefore, he believes the investigation will not significantly impact Quant Mutual Fund’s performance.

Pankaj Mathpal, Founder & CEO of Optima Money Managers, reassured investors about Quant Mutual Fund’s investments, which include prominent stocks such as Reliance Industries Limited (RIL), Jio Financial Services Ltd, Adani Power, Tata Power, SAIL, LIC, and TCS.

He emphasized that these stocks would remain unaffected even if SEBI’s investigation confirms any wrongdoing. Mathpal advised investors to stay invested and continue their SIP investments, explaining that the Net Asset Value (NAV) of a mutual fund, which is the value of its assets minus liabilities, is determined by the performance of the stocks in the fund’s portfolio rather than external factors like SEBI investigations.

In response to SEBI’s investigation into front-running, Quant Mutual Fund issued a strong statement, emphasizing its full cooperation with the regulator. They assured investors that Quant Mutual Fund, as a regulated entity, is committed to transparency and integrity. The fund stated, “We are fully committed to cooperating with SEBI throughout the review process, providing all necessary support and regularly furnishing data as required.”

Front-running is an illegal practice where fund managers, dealers, or brokers, aware of impending large trades, place their own orders ahead of the trade to profit from the expected price movement once the trade is executed.