Quantum Long Term Equity Fund (QLTEF) is an open ended equity scheme. The investment objective of the Scheme is to achieve long-term capital appreciation by investing primarily in shares of companies that will typically be included in the BSE 200 and are in a position to benefit from the anticipated growth and development of the Indian economy and its markets.

Equities are an ideal asset to invest in and have provided reasonable gains in the long term. In the long run, the returns provided by equities tend to be higher than bond rates and inflation.

Quantum Mutual Fund is the first in the country to adopt a direct-to-investor approach. We do not use any distributors and therefore do not incur any distribution commissions. In comparison to other funds, investors can straightaway gain when they opt for the QLTEF. The QLTEF DOES NOT CHARGE ANY ENTRY LOADS. Schemes purchased through distributors usually involve an entry load of 2.25%. The amount may not seem much, but it compounds over the years and can add up to a large amount. Click Here to see how your returns can erode in the longer run (link to reworked cost sheet).

There is also the smaller, but equally important issue of trail commissions. Trail commissions are amounts paid to mutual fund distributors or advisors in the years after you buy the investments. This is a hidden expense as it is usually included in the fund management fees (expense ratio). Ultimately, this comes out of your returns. As the QLTEF does not pay any distributor commission, an investor is also saved the trail commissions.

On a long term basis, the returns of a diversified equity fund would be a reflection of inflation and the GDP growth rate of the country. Just to put things in perspective, the BSE Sensex has generated a CAGR of 21% for the period from 1980 to 2007. The QLTEF has given a return of 45.78% during the last calendar year (2007) as compared to a return of 50.09% for the BSE Sensex TRI and 47.15% for the BSE Sensex. As with any investment in securities, mutual funds are also subject to market risks. The NAV of the units issued under the Scheme can go up or down depending on the various factors and forces affecting the capital markets and money markets.

The asset allocation of the scheme is as follows.

Type of Security	Normal allocation(% of corpus)	Minimum allocation (% of corpus)	Maximum allocation(% of corpus)	Risk profile
Listed Equity & Equity Related Securities of Companies	95-99	65%	99%	High
Unlisted Equity & Equity Related Securities of Companies	0-3	0%	5%	High
Money market instruments	1-5	1%	35%	Low
Liquid Schemes of Mutual Funds	0-5	0%	5%	Low

The fund would benchmark its performance to the BSE Sensex TRI (total returns index).

We prefer the BSE Sensex Total Returns Index to the BSE Sensex as it offers a better comparison of performance. A TRI index includes the impact of all material facts- including dividends, other cash distributions and capital gains. The investor would naturally be entitled to such benefits. The BSE Sensex on the other hand only records the impact of the capital gains.

The scheme offers Growth Plan & Dividend Plan. The dividend plan in turn offers Dividend Payout & Dividend Reinvestment options.

Almost anyone can invest in the QLTEF including…

• Resident adult individuals either singly or jointly (not exceeding three);or on an Anyone or Survivor basis.
• Karta of Hindu Undivided Family (HUF).
• Minors through parent/legal guardian.
• Partnership Firms.
• Companies, Bodies Corporate, Public Sector Undertakings, Association of Persons or bodies of individuals and Societies registered under the Societies Registration Act,1860.
• Banks & Financial Institutions.
• Mutual Funds registered with SEBI.
• Religious and Charitable Trusts, Wakfs or endowments of private trusts (subject to receipt of necessary approvals as required) and Private trusts authorized to invest in mutual fund schemes under their trust deeds.
• Non-Resident Indians (NRIs)/Persons of Indian origin residing abroad (PIO) on repatriation basis or on non-repatriation basis (except those from Canada and the USA).
• Foreign Institutional Investors (FIIs) registered with SEBI on repatriation basis.
• Army, Air Force, Navy and other para-military units and bodies created by such institutions.
• Scientific and Industrial Research Organizations.
• Multilateral Funding Agencies/Bodies Corporate incorporated outside India with the permission of Government of India/ Reserve Bank of India.
• Other schemes of Mutual Funds subject to the conditions and limits prescribed by SEBI Regulations.
• Trustee, AMC or Sponsor or their associates may subscribe to Units under the Scheme.
• Such other individuals/institutions/body corporate etc., as may be decided by the Mutual Fund from time to time, so long as wherever applicable they are in conformity with SEBI Regulations.

The Quantum Long Term Equity Fund is intended for investors with a long term investing horizon. The exit load is imposed to discourage investors who may churn frequently. Such a churn will adversely impact the returns of the other investors. The exit loads are applied on a variable basis depending on the term of the investment. Investors who have stayed invested for at least 2 years will not be charged any exit load

The exit loads are applicable as follows.

Repurchase/ Redemption/Switch Out	Exit load
within 6 months of allotment	4.00%
after 6 months but within 12 months of allotment	3.00%
after 12 months but within 18 months of allotment	2.00%
after 18 months but within 24 months of allotment	1.00%
after 24 months of allotment	Nil

At a first glance, the expense ratio of the QLTEF will appear to be marginally on the higher side. We are still within the limits recommended by SEBI. In the QLTEF, what you see is exactly what you get. There are no hidden expenses. Other funds may be offering a marginally lower expense ratio, but investors may have already lost out on account of entry loads.

Mutual fund entry loads are normally in the region of 2.25%. If there is a difference of about .5% between the expense ratio of QLTEF and any other fund and assuming similar returns of 15% by both funds, the other fund would take 5 years to better the performance of the QLTEF. If the difference is smaller at 0.25%, it would take 9 years to catch up.

	Long Term Capital Gains	Short Term Capital Gains
Individuals, HUFs, Partnership, Indian Companies.	0% tax/ Tax free.	Taxed at 30% (+ surcharge and education cess).Incase transaction of sale is chargeable to STT then the tax rate is 15%.
FIIs	Period of more than 12 months, Taxed at the rate of 10% (+ surcharge and education cess). No benefit of cost inflation index and currency fluctuation.	Same as above
NRIs	Taxed at the rate of 20% (+ surcharge and education cess). No benefit of cost inflation indexation.	Same as above
Specified overseas financial organizations	Period of more than 12 months, Taxed at the rate of 10% (+ surcharge and education cess). No benefit of cost inflation indexation.	Same as above
Non-Residents and Foreign Companies	Subject to income tax of 20% (+ surcharge and education cess)

In addition, income received in the form of dividends by all categories of unit-holders from the scheme will be exempt form income tax in their hands.

We believe that there is no good or bad time to invest. Investors would be better served by saving and investing regularly and leaving the worries to the fund manager. Compounded returns tend to have significant impact over long periods of time. So, the earlier one begins to invest in mutual funds, the better the returns would be.

We do not look too much into the Sensex number and the gain and loss for the day. We are focused on individual stocks and buy them at prices we are comfortable with. If the prices are too high, we do not buy them. We follow a disciplined research and investment process.

A historical analysis of the QLTEF holding portfolio would reveal that whenever stock prices were expensive, we maintained a high cash level. So, when a correction came, our NAV was not affected so much. The higher cash levels also helped us to buy stocks at prices we liked.

• Investing Offline/ Physical way

First time investors in the Quantum Long Term Equity Fund can download the Application form, complete it and send it to any of the collection centres along with the cheque / demand draft of the requisite amount.

In line with the SEBI regulations, investors are also required to send an attested copy of their PAN cards (in the case of joint investors, PAN cards of all investors have to be included) and a copy of their KYC acknowledgement letter / MIN acknowledgement letter.

That is it. Simple and quick.

PAN cards can be attested by any judicial authority, bank manager, ARN distributor, notary public or gazetted officer. NRIs can get their PAN cards attested by a local bank manager or from the Indian consulate of their country of residence. Attestations by notary or judicial authorities of that jurisdiction are also accepted. Presently, it is mandatory for all applications for subscriptions of value of Rs. 50,000/- and above to obtain a KYC compliance letter from the specified Points of Service of CDSL Ventures Limited. To know more about applying for KYC compliance, please click here

• Investing Online

We also offer an online investing option. Investors can invest at any time at their convenience on the internet.

• Visit www.QuantumAMC.com and click on the ‘Invest Online’ link
• First time users can click on the link to create your user ID
• Once you have created your user id and set your password, please send an attested copy of your PAN card along with your user ID and contact number to the Karvy Hyderabad office. (You can also send it to us or the nearest collection centre. Sending it to Karvy, Hyderabad will help cut down the process time)
• Within 24 hours of receipt at the Karvy Hyderabad office, your account will be activated and you will receive an email stating the same.

Once your account is activated, you can start investing online. We currently have banking relationships with most of the major banks in India. Kindly scroll to the last question to view the same.

Owing to the current regulations, we require to have a signed copy of your application. So, after your online account is created, do log on. The first time you invest online, please take a print out of the application form, sign it and send it to us or your nearest collection centre.

Within 10 business days of your first transaction, you will be intimated of your account folio number. On receipt of the folio number, please complete the PIN agreement and send it to us.

This is a one time process. Once we receive the PIN agreement, you can make new investments, redeem your investments and even switch between our schemes online (with exit loads, if applicable)

Of course, we will always be there to aid you in the process and address any doubts or queries you may have.

In case of any information on investing, please do contact our investor service helpdesk on our toll free number 1800-22-3863 (BSNL/MTNL phones) or on 022-2282 9414. We can also be reached at Info@QuantumAMC.com

Organizations interested in investing in QLTEF can refer to the checklist below

Documents	Companies	Trusts	Societies	Partnership	FIIs
Authorization to invest
List of authorized Signatories & specimen signatures
Memorandum & articles of Association
Trust Deed
Partnership Deed
Overseas auditor’s certificate
Notarised Power of Attorney
PAN/Form 49A/60/KYC letter

Subscription – If a valid application form is received and time-stamped before 3 p.m. on any business day and the funds are available for utilization, the investor will be allotted units at the NAV of the same day. If it is received and time-stamped after 3 p.m., the investor will receive the NAV of the next day.

Redemption – If a valid redemption request is received and time-stamped before 3 p.m. on any business day, the investor will receive the proceeds at the NAV of the same day. If it is received and time-stamped after 3 p.m., the NAV considered will be of the next day.

The same timelines would apply for online transactions.

Using the Net Banking facility you can purchase the Quantum Long Term Equity Fund, Quantum Tax Saving Fund, Quantum Equity Fund of Funds and the Quantum Liquid Fund from the following Banks:

• Allahabad Bank
• Axis Bank
• Bank of India
• Bank of Rajasthan
• Bank of Baroda
• Corporation Bank
• Deutsche Bank
• Dhanalakshmi Bank
• Federal Bank
• HDFC Bank
• ICICI Bank
• IDBI Bank
• Indian Overseas Bank
• Karnataka Bank
• Oriental Bank of Commerce
• South Indian Bank
• Standard Chartered Bank
• Vijaya Bank
• Yes Bank