Quant mutual fund: A look at who they are, their philosophy, and success...

Quant founder Sandeep Tandon says their suite of analytical indicators and framework that has allowed building of 'a successful predicting track record' that has benefitted institutional investors and wealth management clients.

Quant Mutual Fund has been in the news recently after reports that the Securities and Exchange Board of India (SEBI) conducted search and seizure operations at its Mumbai and Hyderabad locations on suspicion of "front-running."

Founded by Sandeep Tandon, Quant Mutual Fund got its MF license from the markets regulator in 2017 and is the fastest-growing mutual fund in the country with over ₹90,000 crore of assets under management (AUM).

Issuing a clarification, the company said it is “fully committed to co-operate with the regulator” and "will provide all necessary support and continue to furnish data to SEBI on a regular and as-needed basis".

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 the anticipated price movement when the large trade is executed.

Amid this, we take a look at all you need to know about Quant Mutual Fund.

About Quant

According to the official website, the financial services business emerged "in the midst" of the 2008 global financial crisis. It states ‘Being Relevant’ and ‘Predictive Analytics’ as the "guiding mantras" for the business, and claims "objectivity is our religion".

In a letter from the founder, Sandeep Tandon writes that the group's quant Global Research (qGR) has created a suite of analytical indicators and framework that has allowed building of "a successful predicting track record" that has benefitted institutional investors and wealth management clients.

"To grow wealth, it is imperative to participate in the periodic bubbles but only equipped with a predictive framework and behavioral strength that allows the right exit. This is also derived from the driving theme of my life – ‘timing is everything’, or at least the most important determinant of success ... The benefits of diversification across asset classes will be of utmost importance, more than at any time during the last couple of decades," Tandon said.

How Well is Quant MF performing?

It has AUM worth ₹90,000 crore or approximately $11 billion, as per a Reuters report. It added that Quant MF ranks #18 in terms of AUM among 44 asset managers in India. Over the past 12 months, the investor has seen small-cap benchmark indices soar 69.48 per cent, and mid-cap stock index rise 59.28 per cent.

According to Mint data, the MF's Quant Active Fund Growth, managed by Sanjeev Sharma, Vasav Sahgal, and Ankit Pande, has delivered a CAGR of 31.36 per cent over the past five years and 54.91 per cent in the last year. It has an AUM of ₹10,204.01 crore.

What Are the Investment Philosophy?

The website notes that "being relevant is the guiding philosophy" for quant money managers, adding that the principles of being active, absolute and unconstrained generates enduring value for our clients.

The fund believes that in a dynamic world, "passive investment strategies can no longer outperform" and need "active strategies which can invest in sync with the dynamics at play".

It added that outperformace requires "looking at the world relatively" with investment strategies that have an "absolute objective irrespective of market conditions".

Further, it said that its processes and systems are embedded with the conviction that success in investing "is through cultivation of a multitude of opinions and perspectives" or an "unconstrained perspective" to seek every possible opportunity in any set of circumstances.

What Does The Company Credit for 'Consistent Success'?

The fund attributed its "consistent success" to "studying markets along four dimensions as opposed to one school of thought". These four dimension were listed as: Valuation, Liquidity, Risk Appetite, and Time.

• Valuation: Knowing the difference between price and value.
• Liquidity: Understanding the flow of money across asset classes.
• Risk Appetite: Perceiving what drives market participants to certain actions and reactions.
• Time: Being aware of the cycles that govern how the other three dimensions interact.

What Products Does Quant MF Offer?

As a mutual fund, its offerings include quant Active Fund, quant Absolute Fund, quant Focused Fund, quant Large & Midcap Fund, quant Midcap Fund, quant Smallcap Fund, quant Consumption Fund, quant Infrastructure Fund, quant Tax Plan, quant Liquid Fund, quant Money Market Fund, quant Dynamic Bond Fund and quant Multi Asset Fund.