Quant AMC witnesses first net outflows in 2024 of ₹2,800 crore amid SEBI probe: Report

Quant Mutual Fund, which is under investigation by SEBI for a suspected front-running case, experienced its first weekly net outflows of 2024 in the final week of June, amounting to ₹2,800 crore, as per report by Value Research Online. This outflow marked the end of a six-month streak of positive inflows for the fund house.

Between June 24 and June 30, there was a net outflow of ₹2,800 crore, representing approximately 3 per cent of the assets under management (AUM) from the previous week.

Quant Small Cap Fund, managing assets worth ₹21,423 crore as of May 2024, represents a quarter of the fund house’s total AUM. It experienced the highest outflows, amounting to 28 per cent of the total outflows in the final week of June.

Turning to the outflows from Quant funds relative to their AUM, Quant PSU Fund experienced the largest outflow, amounting to approximately ₹80 crore, which accounts for 8 per cent of the fund’s total assets as of June 21, 2024.

According to a report by Value Research, Quant's five largest mutual funds experienced outflows following front-running allegations in the last week of June. The Quant Small Cap Fund, the largest scheme managed by Quant Mutual Fund with assets totaling ₹22,967 crore as of June 2024, saw an outflow of ₹809 crore after the allegations.

The Quant Active Fund, managing assets worth ₹10,758 crore in multi-cap investments, saw an outflow of ₹374 crore following SEBI's investigation. Similarly, the Quant ELSS Tax Saver Fund, managing ₹10,528 crore in assets, witnessed an outflow of ₹28 crore. Quant Mid Cap Fund and Quant Flexi Cap Fund experienced outflows of ₹306 crore and ₹338 crore, respectively.

The report also noted that the top five funds of Quant Mutual Fund have increased their holdings in HDFC Bank and Reliance Industries.

Quant Small Cap Fund raised its stake in Reliance Industries by 1.16% and by 1.52% in HDFC Bank. Similarly, Quant Mid Cap Fund augmented its holdings in Reliance Industries by 1.30% and by 0.56% in HDFC Bank.

Quant Flexi Cap Fund showed the most significant increase in its holdings in both Reliance Industries and HDFC Bank. The fund boosted its stake by approximately 1.21% in Reliance Industries and by 3.27% in HDFC Bank.

SEBI is investigating a suspected case of front-running linked to Quant MF, a firm managing assets worth ₹93,000 crore. This has sparked concerns among investors regarding the safety of their investments.

This isn't the first occurrence of front-running in mutual funds. Previously, Sebi dealt with a case involving Axis Mutual Fund, resulting in the prohibition of the fund's dealer and 20 other entities from the securities market. Sebi also seized wrongful gains amounting to ₹30.55 crore.