Type of Fund
The Quantum Gold Fund (QGF) seeks to offer investors an innovative, cost-efficient and secure way to invest in gold. The QGF is an Open Ended Fund, which is listed on the National Stock Exchange (NSE) in the form of an Exchange Traded Fund (ETF) tracking domestic prices of gold.
The scheme enables investors to participate in the gold bullion market without taking physical delivery of gold, and to buy and sell units just like a stock on any of the recognized exchanges where it is listed.
Investment Underlying
Investments by the fund will be made in physical gold which would be stored by the custodian and also accompany adequate insurance cover.
Investment Objective
The investment objective of the Quantum Gold Fund is to provide returns that, before expenses, closely correspond to the returns provided by the domestic price of gold.
Scheme Details
Each unit of the QGF will be approximately equal to price of half (½) gram of Gold.
QGF units are listed on the NSE investors can buy or sell units just like any equity share. Investors can buy or sell QGF units through member-brokers on the NSE. The minimum quantity for buying and selling would be at least 1 unit.
Ongoing Sales/Redemption
On an ongoing basis (after the NFO), direct purchases from the Fund would be restricted to only Authorised Participants and Eligible Investors. Authorised Participants and Eligible Investors can buy/redeem in creation unit size and multiples thereof directly from the Fund on all business days. Retail investors can buy and sell only on the exchange
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‘Creation Unit Size’ is the number of QGF units, which is exchanged for the Portfolio Deposit and cash component. The Portfolio Deposit shall consist of physical gold of defined purity and quantity, and the cash component represents the difference between the applicable NAV of units in creation unit size and the market value of physical Gold. The facility of creating/redeeming units in creation unit size will be available only for the Authorised Participants and large or eligible investors as defined in the Scheme Information Document. The Fund may from time to time change the size of the creation unit size in order to equate it with marketable lots of the underlying instruments.
Through the lower cost of operations and the availability of units having smaller denominations, the Quantum Gold Fund would provide investors an excellent means of asset allocation. Thus, an investor can buy gold in unit form, with each unit being approximately equal to ½ gram of Gold, for as low as around Rs. 780 per unit at current prices. (As on October 29th, 2009)
Gold ETFs offer the best of both worlds. The investor has the advantages of owning physical gold, without incurring additional expenses and losses like making charges (for gold jewellery), and bank vault charges (for keeping coins or bars or jewellery).
If investors purchased gold from the retail jeweller or a bank, it would have cost at least a straight loss to the extent of the premium paid (which usually ranges from 5 to 20%). And there are no concerns of quality or theft– The gold backing the ETF is certified by the London Bullion Market Association and stored in vaults of the custodian / sub-custodians. The fund house takes care of all risks of storage and safety.
Buying and selling is very easy. Like any other security, you just buy and sell it though your broker on the stock exchanges. And unlike your jeweller and bank, you do not suffer premiums or making charges in the transactions.
About the Quantum Gold Fund
The Quantum Gold Fund is an Open Ended Exchange Traded Fund (ETF) launched by Quantum Mutual Fund and listed on the NSE. It will track domestic prices of Gold through investments in physical Gold.
Asset Allocation
| Investments |
Indicative Allocation
(% to net assets) |
Risk Profile |
| Physical Gold |
90% to 100%* |
Medium to High |
| Money Market instruments, Short-term Corporate debt securities, CBLO and units of Debt and Liquid Schemes of Mutual Funds |
0% to 10% |
Low |
As the scheme invests 90% to 100% of the net assets into Gold, the scheme will, by and large, be passively managed fund. However, if and when permitted under SEBI regulations, the scheme may invest in gold related securities including derivatives.
Who can invest?
- An Individual who is a Resident of India.
- Non Resident Indian.
- A Non Individual: a firm, a HUF, a company, a bank, a trust, SEBI registered Mutual Fund, FII etc.
How to purchase and sell Quantum Gold Fund units?
QGF units are listed on the NSE. The QGF units can then be bought /sold by the investors on the National Stock Exchange and the Bombay Stock Exchange, through any broker-member.
Further creation and redemption of units, post NFO period, will be through authorised participants and eligible investors only. Retail investors can buy and sell units only through the exchange.
The Quantum Gold Fund Highlights
| Minimum Investments |
One Unit (0.5gm of Gold) |
| Minimum target amount during initial offer period |
Rs. 10 Lacs |
|
Investment Matrix
| |
|
Subscriptions |
Redemptions |
| New Fund Offer |
Small Investors |
Can apply through cheque/draft |
Not Applicable |
| |
Large Investor / Authorised Participant |
Can apply through cheque/draft |
Not Applicable |
| On going basis when the Scheme opens for subscription / redemption |
Small Investors |
Can be traded on Stock Exchange |
Can be traded on Stock Exchange |
| |
Large Investor / Authorised Participant |
Facility Available on all business days in Creation Unit Size |
Facility Available on all business days in Creation Unit Size |
| Trading of units on the Exchange |
Small Investors |
Facility Available on all trading days |
Facility Available on all trading days |
| |
Large Investor / Authorised Participant |
Facility Available on all trading days |
Facility Available on all trading days |
Expense Ratio
Effective 22
nd February 2008, the expense ratio of the fund is 1.00%. Any change in the expense ratio will be updated within two working days.
Entry and Exit Load structure
| Entry Load |
Entry Load |
Nil |
| Exit Load |
Authorised Participants |
Nil |
| Exit Load |
Eligible Investors |
Nil |
The load structure is however, subject to change from time to time and such changes shall be implemented prospectively.
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Every unit of the Quantum Gold Fund will be approximately equal to ½ gram of physical gold (0.995). Thus, an investor can buy gold in units of approximately ½ gram, one of the lowest thresholds for investing in gold. As current prices, this could be as low as around Rs. 780 per unit at current prices. (As on October 29th, 2009)
The Quantum Gold ETF would also be the first in the country without any entry loads, during the NFO
Annual Expenses (Estimated)
Every unit of the Quantum Gold Fund will be approximately equal to ½ gram of physical gold (0.995). Thus, an investor can buy gold in units of approximately ½ gram, one of the lowest thresholds for investing in gold. As current prices, this could be as low as around Rs. 780 per unit at current prices. (As on October 29th, 2009)
The Quantum Gold ETF would also be the first in the country without any entry loads, during the NFO
| Total |
1.25% |
| Investment Management Fees |
0.50% |
| Trustee Fees |
0.05% |
| Custodian Expenses |
0.45% |
| Registrar Expenses |
0.03% |
| Marketing & selling Expenses |
0.05% |
| other Operating Expenses |
0.17% |
The annual expenses are estimated and may change from time to time.
How Gold Fund Works
After the initial offer, the QGF units would be listed on the NSE and retail investors can buy and sell it just like any other security. Retail investors have no direct access to the fund; Only authorised participants and Eligible investors can create/ redeem units directly with the fund.
How to Invest For Retail Investors
With the Quantum Gold Fund, investing in gold has never been so easy. You can now buy and sell gold with ease and convenience, just like equity shares, through any NSE broker-member.
That’s right; all you need to do is call your NSE broker-member and instruct him to buy or sell Quantum Gold Fund units on your behalf. If you trade online, you can input buy/sell orders on your system at your convenience and watch your orders executed at the price you want.
NSE Code : QGOLDHALFBSE Scrip ID: QGOLDHALF BSE Scrip Code: 590099
Broker codes for QGF Units
A list of the ticker codes used by various member-brokers on their online terminals is given below.
| Broker Name |
QGF Unit Ticker |
| HDFC Securities |
QUAGOLEQNR |
| ICICI Direct |
QUGOLD |
| Sharekhan |
QGOLDHALF |
| Reliance Money |
QGOLDHALFEQ |
Important Note : QGF can be found under the equity section, and not mutual fund section, of your online trading service.
So, now you can buy Gold at your convenience. You pay in line with international prices and with no premiums, making charges or retailers’ profit margins.
Besides the simplicity, you are also saved from the hassles of lugging gold to your jeweler. You also do not need to worry about the safety and security – Each and every unit of the QGF is backed by physical gold that is stored in professional vaults and insured against loss.
There is no risk of purity too. All gold bars held by Quantum Mutual Fund are .995 pure bars certified by LBMA approved gold refiners.
And the icing on the cake is that each QGF unit is approximately equal to ½ gram of gold. So, on account of the smaller unit size, gold is still affordable even in times of rising gold prices.
Even if you have no expertise in investing earlier, you can always take your first step towards investing in an unfalliable asset. All you need to do is open a demat account and a share-trading account with any NSE member-broker.
As you execute trades, the net balance of your QGF units will be deposited in your demat account.
Please visit our FAQ section on gold to address any other query you may have on gold.
Please read the Scheme Information Document and Statement of Additional Informaion carefully before investing.