Sandeep Tandon defends Quant Mutual Fund’s strategic swings amid its rapid growth and regulatory scrutiny, emphasising patience and a probabilistic methodology designed to navigate market volatility.
Quant Mutual Fund’s sharp swings expose the cost of conviction
Sandeep Tandon wants investors to see Quant Mutual Fund’s recent volatility not as an accident but as the price of an active, data-heavy strategy. In an interview with Value Research Online, the founder and chief investment officer said the firm’s framework is built to lean into risk when conditions improve and to accept weak relative performance when markets turn defensive. That helps explain why several Quant equity schemes dropped by 10% to 16% in the March 2026 quarter before rebounding by 18% to 37% in the June quarter.
Tandon said Quant’s approach rests on what it calls VLRT: valuation, liquidity, risk appetite and timing. He argued that timing is not a guessing game but a risk-control tool, adding that the firm combines behavioural signals with macro data and long-range historical patterns. He said the method is probabilistic rather than deterministic, and that liquidity and sentiment matter as much as traditional balance-sheet analysis when deciding when to buy or trim positions.
The broader record, however, shows how uncomfortable that style can be for ordinary investors. Value Research Online noted that a buyer of Quant Flexi Cap Fund in December 2025 would have been down 11% within three months, even though the same fund later rose 24% in the June quarter. Tandon acknowledged that such moves can test patience, but said investors need a five- to six-year horizon if they are to stay invested through the strategy’s down cycles.
Mint has previously reported that Tandon built Quant around a data-led philosophy and that the firm has grown rapidly from a small base. The same report also said Quant has faced regulatory scrutiny from Sebi over alleged front-running, a reminder that its rise has not been free of controversy. More recently, Mint reported that Tandon has been shifting back towards small-cap exposure after a period of larger-cap positioning, saying the move reflected a mild risk-on backdrop and lower valuations in smaller companies.
Tandon also used the interview to promote Quant’s newer long-short structured products, arguing that they can offer better risk-adjusted returns even if they lag in strong bull markets. He said the firm’s long-short fund and its mutual fund schemes should not be judged over a single quarter, and that the right comparison period is several years. He also said Quant now has positive inflows again and has grown to about Rs 1 lakh crore in assets in roughly 4.5 years, with the firm reinvesting heavily in technology, governance and compliance.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
