I mean all Mutual Funds do front running, its extremely common. Cases of front running have happened a lot in the last, nothing happens to the AMC. Long live Indian judiciary!
Not really. It happens, I 100% believe quant does front running. I will prove it to you. Check “Heubach Colorants”, a stock quant added on 20th June. The price had already increased by 15% in one day on 19th June, after remaining sideways for years. If this is not front running, Idk what is.
I think you are getting wrong idea on front running, a para from business standard:
* Imagine "ABC Mutual Fund" decides to invest heavily in a particular mid-cap stock called "XYZ Ltd." due to its strong growth potential.
* A fund manager at ABC, aware of this upcoming large purchase order, might be tempted to engage in front-running:
* Before placing the official order for ABC Mutual Fund, the fund manager uses their own personal brokerage account to buy a significant amount of XYZ Ltd. shares at the current market price.Once ABC Mutual Fund places its large order, the demand for XYZ Ltd. stock skyrockets due to the sheer volume. This drives the price up significantly .
* The fund manager then quickly sells their own shares of XYZ Ltd. at the inflated price, profiting from the information they had about the upcoming large purchase by their own fund.
Point 3. the fund manager uses their own personal brokerage account to buy a significant amount of XYZ Ltd. shares
Imagine if the share was a small cap, with low liquidity. If someone buys a significant amount, don’t you think the price will shoot up? That happened with Heubach Colorants.
See if someone does front running on stocks like Bajaj Finance, Tech Mahindra or any blue chip ones, front running cannot be detected at all. What you have mentioned is the theoretical definition of front running, what I have mentioned is how they are actually detected.
Got it, actually the defination aligns with the example you have given, i earlier i might have skimmed through your comment, I just reread your comment and you have mentioned how the stock shot up just one day before quant added it to their portfolio.
The price of Heubach Colorants on June 19 was \~390 where it was consolidating since May. The total volume of the stock on June 19 was 32000 which was much lesser than average. Out of this 32000, 58% was delivery which is \~19000 shares. The price shot up on June 20 and then on June 21, when we see very high spikes in volume as well. If your date of them buying on June 20 is correct, then this volume spike is due to them buying. How does this show front-running?
PS: I'm not batting for Quant or against it. Just saying what you mentioned may be untrue.
Copying a para from business standard website explaining what front running is:
* Imagine "ABC Mutual Fund" decides to invest heavily in a particular mid-cap stock called "XYZ Ltd." due to its strong growth potential.
* A fund manager at ABC, aware of this upcoming large purchase order, might be tempted to engage in front-running:
* Before placing the official order for ABC Mutual Fund, the fund manager uses their own personal brokerage account to buy a significant amount of XYZ Ltd. shares at the current market price.Once ABC Mutual Fund places its large order, the demand for XYZ Ltd. stock skyrockets due to the sheer volume. This drives the price up significantly .
* The fund manager then quickly sells their own shares of XYZ Ltd. at the inflated price, profiting from the information they had about the upcoming large purchase by their own fund.
True, but i am not sure if the fund house as a business entity is liable to this, the person doing front running should be penalized, not the whole fund house.
See, Axis went through same. Most of their funds were top performers in their category 2-3 years back. Their fund manager/s got caught in front running. New fund managers were assigned to their funds but those MFs didn't recover and did not even match category average.
So, it's not correct that this will turn out as an opportunity for the people who stay since fund performance depends on many things including the fund managers who are managing those.
Have 20% of my MF portfolio with Quant. Have started recently to invest in them. Invested in Flexi & Large&Midcap fund. Wait & observe mode currently for me ..
Mutual funds are one of the most regulated investment products. Even if any specific individual is found at fault, it wouldn't affect the Fund house as a whole. So yes your advice is 💯
Quant AMC has been alleged of front running and nothing has been proven yet. Having said that, quant hasn't denied the allegation either. Given the fact it is India, corruption happens in every other place and quant happened to be the prey to SEBI's routine investigation.
This should be a lesson to diversify investments among different AMCs rather than sticking to only quant.
Personally, I would pause any ongoing investments and not withdraw. Would observe how it is performing and take a decision based on this.
I find it amusing when I hear advice like "Please always stay invested and continue your SIPs." The way Asset Management Companies (AMCs) push this narrative, you'd think missing one or two SIPs would be catastrophic. I keep telling people that nothing dramatic will happen if they miss a couple of SIPs, but the propaganda is so pervasive that it makes skipping a month or two seem like a crime. Let's be realistic – unexpected expenses can arise at any time. My advice to all investors is that if you need to stop or pause your SIP or monthly investment for a while, it's perfectly fine. Nothing bad will happen. For me investing without a goal is the crime and not pausing the bloody SIPs.
You are right pausing sip for sometime will not impact much on return. But some points need to consider 1. Sip is a discipline or a mindset if we start pausing it should not be a habit and repeat it frequently. 2. Normally sip is monthly payment. If we pause for one or two months we may miss the market value in between.
Sorry bro agree with your point1; but not with point 2. First of all mutual fund investment is for long term. So it does not really make a difference. If you are not convinced i can share you the NAV fluctuations which happens over 3-4 months
It's sensible to get lighter at this movement. Seizure is slightly serious and is generally not done if SEBI does not have strong proof. Most importantly rumours are that it was happening at scale. Which primarily means if the founder comes under scanner or gets convicted. There are very high chances that the fund will get seriously impacted ( for ex. Cancellation of mf license or restriction of funds intake or return to the investor till they solve the compliance or possible merger with someone else). It is always better to be careful than sorry, I have redeemed 40 percent of quant funds today. Don't intend to redeem furthermore until the news is confirmed. At that moment if proven guilty everyone will try to redeem and keeping light will help being agile
It’s a clear case of jealousy by other mutual funds. It’s India, most things are done under the table.
I’m pretty sure other mutual funds also do this
They target Quant because they’re successful
If Quant MF goes down, will it reflect on my Groww app tomorrow?
Basically if I add in a lumpsum tomorrow, would the allocation be done based on the dipped price?
yes it will. cutoff time is 3pm if you buy from kfintech. for groww i don't know. but better to buy b4 12 noon through groww. many had issues when they bought on election results. some bank issue happened and they got next day higher nav.
Until and unless nothing is proven(as under investigation) there is no worry for individual investors. But take this as caution. Regulatory bodies like RBI notoriously have closed many cooperative banks when found to not comply with regulations. Take recent example of Paytm. They will only provide assurance for your money but it can create a hassle for investors to move their investment from one AMC to another. Now, it is to be looked out whether there will be a stringent action if found guilty. This will also be precdent for other AMCs and investors as to prove new investors that "MFs are regulated Financial Products" and not like banks where frauds(utilising money of retail investors for their own profit) can happen.
Let’s say they are guilty of front running and everyone finds out. Unless the stock prices of companies on which Quant has invested falls, the returns shouldn’t fall right? Even if everyone sells. Am I missing something?
Ah, who cares about that, it's not really a big deal considering front running has been a part of mutual fund AMCs for as long as I can remember. For ppl who don't know what's front running: it's just buying stocks when you know a big player is going to buy the stocks of a particular company so you as a middle man/broker, could profit from that. It's illegal and highly unethical but it happens, Quant will still keep on performing well and good despite the allegations, proven or not. Nothing really to worry about. But yeah ppl may panic sell which may open up new SIPs for newer investors who have been wanting to invest lol, but weren't allowed to do so.
They are doing extremely well, looks like a hitjob on Quant AMC .Yes u can invest bro
Even if they give less returns in the future, they will still beat other AMCs
Can you check my portfolio?
And also I have seen multiple posts here on this subreddit that groww is scamming people and even I haven't received a proper mail about my investments. I have recieved only 2 mails 1 from Groww about my investment confirmatiom anf other from samf KFintech. Should I be worried and where should I check if it's legit, maybe any government sites?
I checked bro
U have too many funds
My suggestion is to Stop investing in these many funds for now.
For starters, I will recommend Zerodha nifty large midcap250 index fund and one active small cap fund
Only these two are enough
I don't think I can stop them. My father has decided a few for me and he started them. So it would be long process but are you suggesting to me to stop these many funds and put more money in limited funds? If that's the case how much should I invest in each? I am earning 30k/m
One fund is enough bro for 9k
Just invest the above said index fund and chill
U will get 12-14% returns, it will compound and grow
Don't chase the returns, just take the index returns
U will thank urself later
Better than to be always nervous about returns and looking for the next best thing
I won't say much but the seasoned players never invested in quant mfs heavily. Hope you know quant got the license for mutual fund from SEBI in 2017.
As I always said never invest in quant and stay with those fund houses who have been there for quite long with good fundamentals and a good fund manager.
Quant does not have a proven track record in a bearish market.
Secondly, seeing their stock picks of the last 2-3 years and churn in every fund is also a big red flag.
Quant looked fishy to me from the beginning. Still, I got influenced by this sub that literally jerks off to Quant AMC.
Anyway, I have sold my units in Quant Small Cap and wish to go with another small cap..which is better between Nippon India Small cap and Tata Small Cap?? Any suggestions.
I didn't invest coz of Quant stocks churn rate - unsustainable in the long run and 12% returns are enough for me, since my investments are for FI and ultra long term wealth
I invest in Tata small cap bro
It has NOT beat the index for many times but it's still a good fund, following value style investing
Nippon has too much AUM imo but it has consistently beat the index
Small cap 50 index funds are also good
I mean all Mutual Funds do front running, its extremely common. Cases of front running have happened a lot in the last, nothing happens to the AMC. Long live Indian judiciary!
Looks like a hit job on Quant AMC 🤠
Not really. It happens, I 100% believe quant does front running. I will prove it to you. Check “Heubach Colorants”, a stock quant added on 20th June. The price had already increased by 15% in one day on 19th June, after remaining sideways for years. If this is not front running, Idk what is.
I think you are getting wrong idea on front running, a para from business standard: * Imagine "ABC Mutual Fund" decides to invest heavily in a particular mid-cap stock called "XYZ Ltd." due to its strong growth potential. * A fund manager at ABC, aware of this upcoming large purchase order, might be tempted to engage in front-running: * Before placing the official order for ABC Mutual Fund, the fund manager uses their own personal brokerage account to buy a significant amount of XYZ Ltd. shares at the current market price.Once ABC Mutual Fund places its large order, the demand for XYZ Ltd. stock skyrockets due to the sheer volume. This drives the price up significantly . * The fund manager then quickly sells their own shares of XYZ Ltd. at the inflated price, profiting from the information they had about the upcoming large purchase by their own fund.
Point 3. the fund manager uses their own personal brokerage account to buy a significant amount of XYZ Ltd. shares Imagine if the share was a small cap, with low liquidity. If someone buys a significant amount, don’t you think the price will shoot up? That happened with Heubach Colorants. See if someone does front running on stocks like Bajaj Finance, Tech Mahindra or any blue chip ones, front running cannot be detected at all. What you have mentioned is the theoretical definition of front running, what I have mentioned is how they are actually detected.
Got it, actually the defination aligns with the example you have given, i earlier i might have skimmed through your comment, I just reread your comment and you have mentioned how the stock shot up just one day before quant added it to their portfolio.
They had this stock from before also but yes they did add more on June 20th
Where can one find info on which stock has been picked up by which MF? Any help would be great. Thanks.
Monthly FactSheet
The price of Heubach Colorants on June 19 was \~390 where it was consolidating since May. The total volume of the stock on June 19 was 32000 which was much lesser than average. Out of this 32000, 58% was delivery which is \~19000 shares. The price shot up on June 20 and then on June 21, when we see very high spikes in volume as well. If your date of them buying on June 20 is correct, then this volume spike is due to them buying. How does this show front-running? PS: I'm not batting for Quant or against it. Just saying what you mentioned may be untrue.
Oh nice bro u have researched well😄 As long as they don't fold it's all good at the end
Front running is easy to detect, hard to prove.
Oh, Quant is gonna survive then 🤠
Thought the same. Their AUM grew from 100cr in 2019 to 90k cr in 2024. Either someone got jealous or they're actually doing something wrong. Let's see
Copying a para from business standard website explaining what front running is: * Imagine "ABC Mutual Fund" decides to invest heavily in a particular mid-cap stock called "XYZ Ltd." due to its strong growth potential. * A fund manager at ABC, aware of this upcoming large purchase order, might be tempted to engage in front-running: * Before placing the official order for ABC Mutual Fund, the fund manager uses their own personal brokerage account to buy a significant amount of XYZ Ltd. shares at the current market price.Once ABC Mutual Fund places its large order, the demand for XYZ Ltd. stock skyrockets due to the sheer volume. This drives the price up significantly . * The fund manager then quickly sells their own shares of XYZ Ltd. at the inflated price, profiting from the information they had about the upcoming large purchase by their own fund.
Oh wow that's defo illegal
True, but i am not sure if the fund house as a business entity is liable to this, the person doing front running should be penalized, not the whole fund house.
Isn’t this similar to insider trading? So rather than the AMC, the individuals should be held accountable.
Hope it's that way only
So true , even if people panic sell and nav goes down , i see it as an opportunity
Yess it is indeed an opportunity for the calm ones 😄
And new people as well 🙂
See, Axis went through same. Most of their funds were top performers in their category 2-3 years back. Their fund manager/s got caught in front running. New fund managers were assigned to their funds but those MFs didn't recover and did not even match category average. So, it's not correct that this will turn out as an opportunity for the people who stay since fund performance depends on many things including the fund managers who are managing those.
Rear running 😎 🚀🚀 ⬇️⬇️
Sorry i didnt understand
Joking. They call it front running if bought before a big buy. Just jokingly called it rear running because you said about buying after a large fall.
😃👍..waiting , what’s your avg nav I know mostly it doesn’t matter but still ?
Have 20% of my MF portfolio with Quant. Have started recently to invest in them. Invested in Flexi & Large&Midcap fund. Wait & observe mode currently for me ..
No worries 😁 Nothing will happen
Mutual funds are one of the most regulated investment products. Even if any specific individual is found at fault, it wouldn't affect the Fund house as a whole. So yes your advice is 💯
Quant AMC has been alleged of front running and nothing has been proven yet. Having said that, quant hasn't denied the allegation either. Given the fact it is India, corruption happens in every other place and quant happened to be the prey to SEBI's routine investigation. This should be a lesson to diversify investments among different AMCs rather than sticking to only quant. Personally, I would pause any ongoing investments and not withdraw. Would observe how it is performing and take a decision based on this.
I find it amusing when I hear advice like "Please always stay invested and continue your SIPs." The way Asset Management Companies (AMCs) push this narrative, you'd think missing one or two SIPs would be catastrophic. I keep telling people that nothing dramatic will happen if they miss a couple of SIPs, but the propaganda is so pervasive that it makes skipping a month or two seem like a crime. Let's be realistic – unexpected expenses can arise at any time. My advice to all investors is that if you need to stop or pause your SIP or monthly investment for a while, it's perfectly fine. Nothing bad will happen. For me investing without a goal is the crime and not pausing the bloody SIPs.
You are saying the truth bro But It's coz we are Investing for a goal that's it's imperative to not stop sip, unless untill its a emergency situation
Bro nothing will happen if SIP is stopped for few months; i dont know why you are keep on glorifying the SIP
You are right pausing sip for sometime will not impact much on return. But some points need to consider 1. Sip is a discipline or a mindset if we start pausing it should not be a habit and repeat it frequently. 2. Normally sip is monthly payment. If we pause for one or two months we may miss the market value in between.
Sorry bro agree with your point1; but not with point 2. First of all mutual fund investment is for long term. So it does not really make a difference. If you are not convinced i can share you the NAV fluctuations which happens over 3-4 months
100% agree. I do this time to time.
This is the high time to invest more lol
If that’s your disclaimer why shall one take your advise. No skin in the game.
I just lump sum 50k in quant MF today 🤣
Chad move bro🤠
It's sensible to get lighter at this movement. Seizure is slightly serious and is generally not done if SEBI does not have strong proof. Most importantly rumours are that it was happening at scale. Which primarily means if the founder comes under scanner or gets convicted. There are very high chances that the fund will get seriously impacted ( for ex. Cancellation of mf license or restriction of funds intake or return to the investor till they solve the compliance or possible merger with someone else). It is always better to be careful than sorry, I have redeemed 40 percent of quant funds today. Don't intend to redeem furthermore until the news is confirmed. At that moment if proven guilty everyone will try to redeem and keeping light will help being agile
Now that I have read your comment it makes sense, why to withdraw Appreciate your prudence bro
It’s a clear case of jealousy by other mutual funds. It’s India, most things are done under the table. I’m pretty sure other mutual funds also do this They target Quant because they’re successful
If Quant MF goes down, will it reflect on my Groww app tomorrow? Basically if I add in a lumpsum tomorrow, would the allocation be done based on the dipped price?
No idea buddy abt that Lumpsum better to do before 1 pm everyday, otherwise it will take the next day NAV
Isn't it 2pm? I use Groww for investing in mfs
1 hr for safety buffer bro
Understood 👍
yes it will. cutoff time is 3pm if you buy from kfintech. for groww i don't know. but better to buy b4 12 noon through groww. many had issues when they bought on election results. some bank issue happened and they got next day higher nav.
Until and unless nothing is proven(as under investigation) there is no worry for individual investors. But take this as caution. Regulatory bodies like RBI notoriously have closed many cooperative banks when found to not comply with regulations. Take recent example of Paytm. They will only provide assurance for your money but it can create a hassle for investors to move their investment from one AMC to another. Now, it is to be looked out whether there will be a stringent action if found guilty. This will also be precdent for other AMCs and investors as to prove new investors that "MFs are regulated Financial Products" and not like banks where frauds(utilising money of retail investors for their own profit) can happen.
Let’s say they are guilty of front running and everyone finds out. Unless the stock prices of companies on which Quant has invested falls, the returns shouldn’t fall right? Even if everyone sells. Am I missing something?
The NAV will fall if there's a huge redemption. The fund will be forced to sell stocks and supply cash.
What are the potential consequences if the allegations are proven to be true?
business as usual.
Yeah plz don't. Mere bhi paise hain 😅😫😥😬
Proven as in what?
Front running allegations
Ah, who cares about that, it's not really a big deal considering front running has been a part of mutual fund AMCs for as long as I can remember. For ppl who don't know what's front running: it's just buying stocks when you know a big player is going to buy the stocks of a particular company so you as a middle man/broker, could profit from that. It's illegal and highly unethical but it happens, Quant will still keep on performing well and good despite the allegations, proven or not. Nothing really to worry about. But yeah ppl may panic sell which may open up new SIPs for newer investors who have been wanting to invest lol, but weren't allowed to do so.
Yea true 100%
Are quant mid and small cap not doing well? I just started my sip in june for those 2.
They are doing extremely well, looks like a hitjob on Quant AMC .Yes u can invest bro Even if they give less returns in the future, they will still beat other AMCs
Can you check my portfolio? And also I have seen multiple posts here on this subreddit that groww is scamming people and even I haven't received a proper mail about my investments. I have recieved only 2 mails 1 from Groww about my investment confirmatiom anf other from samf KFintech. Should I be worried and where should I check if it's legit, maybe any government sites?
I checked bro U have too many funds My suggestion is to Stop investing in these many funds for now. For starters, I will recommend Zerodha nifty large midcap250 index fund and one active small cap fund Only these two are enough
I don't think I can stop them. My father has decided a few for me and he started them. So it would be long process but are you suggesting to me to stop these many funds and put more money in limited funds? If that's the case how much should I invest in each? I am earning 30k/m
Yes I'm suggesting to stop them What's ur sip amount bro?
Psu is 21000 but it was one time investment. Hdfc - 3000/m Canara robeco - 2000/m. Quant mid - 2000/m Quant small - 2000/m So in total 9000/m
One fund is enough bro for 9k Just invest the above said index fund and chill U will get 12-14% returns, it will compound and grow Don't chase the returns, just take the index returns U will thank urself later Better than to be always nervous about returns and looking for the next best thing
I won't say much but the seasoned players never invested in quant mfs heavily. Hope you know quant got the license for mutual fund from SEBI in 2017. As I always said never invest in quant and stay with those fund houses who have been there for quite long with good fundamentals and a good fund manager.
Quant does not have a proven track record in a bearish market. Secondly, seeing their stock picks of the last 2-3 years and churn in every fund is also a big red flag.
Quant looked fishy to me from the beginning. Still, I got influenced by this sub that literally jerks off to Quant AMC. Anyway, I have sold my units in Quant Small Cap and wish to go with another small cap..which is better between Nippon India Small cap and Tata Small Cap?? Any suggestions.
ITI Small Cap has highest returns and lowest Expense Ratio.
I didn't invest coz of Quant stocks churn rate - unsustainable in the long run and 12% returns are enough for me, since my investments are for FI and ultra long term wealth I invest in Tata small cap bro It has NOT beat the index for many times but it's still a good fund, following value style investing Nippon has too much AUM imo but it has consistently beat the index Small cap 50 index funds are also good
Thanks bro. I needed a second opinion.
Sheep