Experts say that since Quant Mutual Fund has invested in quality stocks like Reldani Power, Tata Power, SAIL, LIC, etc., the chances of any decline in NAV due to SEBI's action are minimal.
Sebi is currently investigating Quant Mutual Fund for suspected front-running, an illegal practice where fund managers place personal orders before executing large trades to benefit from anticipated price changes.
Kartik Jhaveri, director at Transcend Capital and a seasoned professional in wealth management, responded to news of Sebi's investigation into Quant Mutual Fund by emphasizing that similar investigations have occurred in the past. He suggested that such developments were unlikely to significantly impact the outlook for mutual fund investors.
Given previous instances of Sebi scrutinizing fund managers for front-running, investors needn't be overly concerned about ongoing investigations. Their investments are safeguarded through diversified portfolios of stocks in mutual funds, where the NAV is predominantly influenced by market performance. Therefore, the impact on Quant Mutual Fund's performance from this investigation is likely minimal.
Following Sebi's investigation into front-running allegations, Quant Mutual Fund issued a robust clarification, emphasizing its full commitment to cooperating with the regulator:
"We want to assure you that Quant Mutual Fund is a regulated entity, and we are dedicated to collaborating fully with the regulator throughout this review process. We will provide all required support and regularly furnish data to Sebi as needed. This demonstrates our steadfast commitment to transparency and integrity."
Front-running is an illicit practice where fund managers, dealers, or brokers exploit advance knowledge of forthcoming large trades by executing their own orders beforehand. This unethical tactic aims to capitalize on anticipated price movements once the larger trade is executed.
Disclaimer: The opinions and suggestions expressed above belong to individual analysts, experts, and brokerage firms, and do not represent those of Mint. We recommend investors consult certified experts before making any investment decisions.
