Quant MF front-running case: Reliance, Adani Power, IRB Infra, SAIL among top holdings of Quant Smallcap

Quant Mutual Fund’s small-cap investment vehicle holds an interesting array of stocks: shares of Reliance Industries, HDFC Bank, IRB Infrastructure, RBL Bank, and Jio Financial Services. 

The fund house, which is being probed on suspicion of front-running, runs the country's third-largest small-cap fund, handling assets under management (AUM) of more than ₹21,243 crore as on 31 May. 

Around 68% of the fund is invested in small-cap stocks, and 28% in large-cap stocks.

The top holdings of Quant Small Cap Fund are Reliance Industries (9.47%), Jio Financial Services (5.91%), HDFC Bank (5.75%), IRB Infrastructure Developers (3.77%), Bikaji Foods International (3.15), Aegis Logistics (3.12%), Housing & Urban Development Corp (2.89%), RBL Bank (2.81%), National Aluminium Co. Ltd. (2.73%), and Arvind (2.51%).

Markets regulator Securities and Exchange Board of India (Sebi) is probing the fund house for suspected front-running. 

Front-running is an illegal practice where fund managers or dealers or brokers who are aware of upcoming large trades place their own orders beforehand to profit from an anticipated price movement when the large trade is executed.

Read here: ’Cooperating with Sebi…’ says Quant Mutual Fund on front-running allegations

In Quant's small-cap scheme, the financial services sector has the highest weightage in the scheme at 25.3%, followed by public sector undertakings at 14.3%, and the oil & gas sector at 12.9%. 

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The Nifty Smallcap 250 TRI (Total Return Index) includes 250 companies that are ranked 251st to 500th in terms of market capitalization from the broader Nifty 500 index. It has given 27.81% returns in the past six months and 17.86% year-to-date. Over the past year, the Quant Small Cap Fund has given 64.64% returns. Since its inception, the scheme has returned 12.40%.

Another top scheme by the fund house is the Quant Active Fund, a multicap allocation scheme with an AUM of ₹10,204 crore.

The scheme’s 45.61% holdings are in large-cap stocks, 27.66% in small-cap stocks, and 25.69% in mid-cap stocks.

Its top holdings include Reliance Industries (9.57%), HDFC Bank (5.61%), Adani Power (4.43%), Aurobindo Pharma (3.91%), Jio Financial Services (3.85%), Steel Authority of India (3.42%), Jindal Steel & Power Ltd (3.23%), Britannia Industries (3.21%), Aegis Logistics (2.99%) and Escorts Kubota (2.92%).

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Since its inception in 2001, Quant Active Fund has given 19.95% returns. The scheme's returns in the past six months amounted to 26.56% and 50.73% in one year.

Meanwhile, the fund house has issued a clarification to its investors regarding Sebi's probe report on the issue, saying it was “fully committed to cooperate with the regulator”.

Quant Mutual Fund,  founded by Sandeep Tandon, received a mutual fund license from Sebi in 2017. It is among the fastest-growing mutual funds in the country, with a total AUM of more than ₹90,000 crore.