 "Don't fall prey to narratives: Quant MF CEO Tandon tells investors")
In his first address to investors after the front-running investigation at Quant Mutual Fund (MF) came to the fore, chief executive officer (CEO) Sandeep Tandon said investors have nothing to worry about as the fund’s management will continue unaffected and schemes remain high on liquidity.
“About 53 per cent of our portfolio is liquid. We have demonstrated our ability to manage both the fear of knowns and unknowns. We are a risk management fund house,” he said.
Tandon, who is also the founder and chief investment officer of Quant MF, said the fund house was cooperating with the Securities and Exchange Board of India (Sebi). In fact, a dedicated team was providing data to the regulator regularly.
Tandon said there has been marginal outflow from Quant MF schemes post the news of regulatory action. This is due to some people in the media creating panic among investors despite having a “fiduciary duty of not to do so.”
He said the assets under management (AUM) of the fund house came down by nearly Rs 1,000 crore to Rs 92,000 crore.
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He pegged the net outflow from equity schemes in the last few days at Rs 1,398 crore.
Tandon said that investors should not get "capitulated" by narratives in the market and miss out on investing opportunities. He added that investors should stick to their equity investments despite the talk around expensive valuations as the next three decades belongs to India.
Citing the Hindenburg crisis in Adani group companies last year, he said that Quant MF has remained unaffected by subjectivity and continued to manage its funds based on set processes and data analytics.
“In the quarter ended March 2023, we were the worst performers in all the equity categories. After three quarters, we were back at the top of the charts,” he said.
“We are agile and data-driven. Our processes are strong and so is our analytics. We say objectivity is our religion and data is our god,” he added.
Quant MF was among the few fund houses which had active equity exposure to Adani group stocks when the Hindenburg report led to a crash in those stocks in the first few months of 2023.
He added that the performance of his schemes could have been even better if he had stuck to its holdings in Adani stocks and PSU shares that were affected post the report.
“The outperformance would have been massive,” he said.
Sebi conducted a search and seizure operation on Quant MF on Friday over suspected front-running.
In a statement on Sunday, the fund house said that it has received inquiries from Sebi and that it was cooperating in the review.