Quant Mutual Fund has established itself as a key player in the Indian mutual fund industry, renowned for its data-driven and quantitative investment strategies. Founded with the vision to leverage quantitative analysis and technology in investment management, Quant Mutual Fund has consistently aimed to provide superior risk-adjusted returns to its investors.

The fund house emphasises innovative and algorithmic investment approaches. It distinguishes it from its peers in the mutual fund industry, catering to the growing demand for scientific and evidence-based investment solutions.

Quant offers a wide range of products to meet the diverse needs of investors. Its product basket includes equity funds, debt funds, hybrid funds, and thematic funds. Some of the notable schemes are the Quant Small Cap Fund, Quant Mid Cap Fund, Quant ELSS Tax Saver Fund, Quant Active Fund and Quant Dynamic Asset Allocation Fund.

Each of these funds is designed with specific investment goals and risk profiles in mind, ensuring that there is a suitable option for every type of investor. The fund house’s ability to diversify its offerings has been instrumental in attracting and retaining a broad investor base.

Quant MF’s Growth Trajectory

Quant Mutual Fund is a relatively young mutual fund company in the industry, established in 2018 after acquiring the older Escorts Mutual Fund. Despite its short history, Quant Mutual Fund has grown its AUM substantially to over Rs 94,000 crore as of July 12, 2024, making it one of the top AMCs in India.

Quant’s investment philosophy focuses on identifying and capitalising on market inefficiencies. By leveraging advanced quantitative models and data analytics, the fund has been able to make informed investment decisions, contributing to its stellar performance. The milestone of reaching Rs 94,000 crore in AUM underscores the effectiveness of this approach.

Recently, Sandeep Tandon-led Quant Mutual Fund has achieved a significant milestone. The fund’s Assets Under Management (AUM) have reached an all-time high of Rs 94,000 crore. This achievement reflects the fund house’s successful investment strategies and the trust it has garnered from investors.

Many of its schemes have outperformed their benchmarks, delivering impressive returns despite market volatility. The focus on data-driven decision-making and proactive risk management has enabled Quant Mutual Fund to navigate market challenges effectively, ensuring consistent performance across its product portfolio.

However, this achievement comes at a crucial juncture, as the fund house is simultaneously under the scrutiny of the Securities and Exchange Board of India (SEBI) due to allegations of front-running.

[Read: Quant Mutual Fund Comes Under SEBI Radar Over Alleged Front-running]

SEBI Probe and Front-Running Suspicions

Despite its remarkable success, Quant Mutual Fund has been under the lens of SEBI for the past few weeks. The regulatory body has initiated a probe into allegations of front-running malpractice where individuals with insider knowledge execute trades ahead of large orders to benefit from the subsequent price movements.

SEBI suspects that some individuals with knowledge of upcoming trades by Quant Mutual Fund might have been placing their own orders beforehand (front-running) to profit from the price movement when the actual trades are executed. This deceptive practice disadvantages investors in the fund, as it reduces the potential returns for the fund itself.

The news of the investigation led to a significant outflow of investor money from Quant MF in June 2024, with some reports suggesting redemptions of over Rs 2,800 crore. Quant Mutual Fund has maintained their innocence and is cooperating with SEBI’s investigation.

[Read: What does Quant Mutual Fund Has to Say About the SEBI Probe?]

Quant MF’s AUM Reaches All-Time High!

Quant Mutual Fund has informed its unitholders that the assets under management (AUM) and net asset values (NAV) for most schemes have reached a record high level as of July 12, 2024. The fund house conveyed this information to investors via mail on Saturday, July 13, 2024.

Despite experiencing heavy net outflows over the last three weeks, the fund house’s AUM remains at an all-time high. Quant Mutual Fund’s achievement of reaching Rs 94,000 crore in AUM is a remarkable milestone that underscores its growth and market position.

In the e-mail addressed to its investors, Quant Mutual Fund mentioned, “Our superior risk-adjusted returns generated by our schemes are in line with our dynamic style of money management. Less than 1% of the AUM had been affected due to the recent outflows amounting to Rs 696 crore in net outflows and Rs 877 crore in net equity outflows. Our liquidity situation remains extremely healthy, with more than 54% of assets being very liquid, which includes Large-cap stocks, T-bills, G-Secs, Gold and Silver.

At Quant Mutual Fund, we consider fundamentals the ‘Aatma,’ liquidity the ‘Prana’ and sentiments the ‘Maaya’. We assure you that our VLRT framework is a unique style of managing assets, combining liquidity analytics and sentiment analytics with valuations.”

“Over the past few months, we have been experiencing a mild degree of risk aversion based on our risk analytics, and our portfolios have been rebalanced to reflect the current micro and macro environment. This pattern can be observed in our quarterly returns as we have increased our exposure towards the consumption sector in a big way, and we continue to remain constructive for the manufacturing and infrastructure sector.” said the mutual fund house in its communication mail.

According to the last available data in ACE MF, in the June 2024 portfolio of Quant Mutual Fund, the total assets under management were recorded at Rs 90,625 crore. The AUM of Quant schemes has increased compared to May 2024. Quant Small Cap Fund saw the highest increase in asset base, rising by Rs 1,724 crore to reach a total AUM of Rs 22,967 crore in June, up from Rs 21,242 crore in May 2024.

[Read: SEBI Mandates Internal Fraud Detection Mechanism for Mutual Funds]

The Road Ahead for Quant Mutual Fund

The remarkable growth of Quant Mutual Fund’s AUM sets the stage for further expansion and innovation. The fund house is well-positioned to capitalise on emerging trends and opportunities in the investment landscape.

This could include the launch of thematic funds, international funds, and ESG (Environmental, Social, and Governance) funds. Diversifying its product offerings will help the fund attract new investors and retain existing ones. The adoption of Artificial Intelligence (AI) and Machine Learning (ML) will enable the fund house to refine its investment strategies and deliver better outcomes for investors.

The achievement of an all-time high AUM of Rs 94,000 crore by Quant Mutual Fund is a testament to its strategic vision, innovative approach, and commitment to delivering value to investors. Given the current scenario, maintaining strong relationships with investors is also crucial for Quant Mutual Fund’s sustained growth.

The future looks promising for Quant Mutual Fund, with numerous opportunities for expansion, innovation, and value creation. Investors and industry stakeholders will be keenly watching its journey and the impact it makes in the years to come.

Although the fund’s impressive AUM growth is a positive indicator of its market standing and performance. On the contrary, the concurrent SEBI probe into front-running allegations serves as a reminder of the importance of regulatory compliance and ethical practices in the mutual fund industry.

[Read: Front-running Cases in Mutual Funds: All You Need to Know]

Investors are advised to closely monitor the developments surrounding the SEBI probe. While the allegations are serious, it is essential to await the regulatory body’s findings before making any hasty decisions.

The mutual fund industry, meanwhile, must continue to uphold the highest standards of integrity to ensure sustained investor confidence and market stability. In the evolving landscape of mutual funds, striking a balance between growth and compliance is paramount.

As Quant Mutual Fund navigates this challenging phase, its actions will likely set a precedent for the industry’s future conduct and regulatory oversight.

Disclaimer: PersonalFN does not receive any monetary compensation from the fund house or scheme names stated in the article.

This article first appeared on PersonalFN here