Mumbai, Wednesday, January 23rd, 2008:
Since its creation in 2006, Quantum Mutual Fund continues to focus on offering investors sensible products required for planning their long term investments. Quantum was the 29th Asset Management Company but the 1st to raise the dangers of a high-cost, distribution-led, asset gathering business model that could be harmful to the interest of long-term investors. SEBI has now initiated better rules and regulations to reduce the costs for investors and protect their interests.
We are pleased to announce that, in continuation of the desire to work for the long term benefits of the investors, Quantum Mutual Fund, the pioneers of direct-to-investor and low cost mutual funds in India, is launching its first commodity-related offering: the Quantum Gold Fund, an exchange traded fund.
Quantum Gold Fund is an open ended Exchange Traded Fund, which is proposed to be listed on the National Stock Exchange of India (NSE), closely tracking the domestic prices of gold.
The Quantum Gold Fund seeks to offer investors an innovative, cost-efficient and secure way to invest in gold. Quantum Gold Fund enables investors to buy gold without the hassles of holding and storing physical gold. The Quantum Gold Fund will closely track, before expenses, the movement in the price of the underlying asset - physical gold of 0.995 fineness.
Continuing with Quantum’s mission of keeping costs low for our investors, the Quantum Gold Fund would also be the first Gold ETF in the country without any entry load during the NFO. The New Fund Offer (NFO) of the scheme would be open from Thursday, 24th January, 2008 to Friday, 8th February 2008. During this NFO period, investors can subscribe to the scheme with a minimum investment of Rs. 5,000 and further multiples of Rs. 1,000. Subsequent to the NFO, the Quantum Gold Fund units are proposed to be listed on the NSE, within 30 days of the allotment, subject to all regulatory and procedural approvals. Investors can then buy / sell the Quantum Gold Fund units on the Exchange, through any broker-member.
The underlying physical gold per unit of Quantum Gold Fund is approximately equal to ½ gram. This ½ gram unit size is the first time such a low-unit gold fund has been introduced in India. Once the Quantum Gold Fund units are listed on the NSE, investors will find it more affordable as they can buy smaller amounts of gold which require lower investments. At current market prices, this means that an investment of as low as Rs. 550 (approximately) can start you on your way to building a little pile of gold.
But why should investors buy gold?
Commenting on the importance of gold in an overall portfolio, Ajit Dayal, Director of Quantum Asset Management Company Private Limited, said, “Investors should consider investing in gold as insurance. We all buy life insurance in case something goes wrong so that our families are not affected by our personal absence. Gold is the insurance for your overall portfolio. Gold is a hedge, insurance, in one sense because it addresses the basic question: what if there is a global crisis and leaders are unable to handle it? I encourage investors to invest anywhere between 5% and 10% of their total portfolio in gold. This does not mean that we dislike the Indian equity markets. On the contrary, we continue to be optimistic and invest in the Indian stock markets. A person buying insurance does not stop living – buying gold does not mean you have to sell shares.”
In the periods when stock markets declined, gold could have limited your overall losses
| Year | BSE Sensex
Returns | Gold in
Rupees |
| 1982 | 4% | 21% |
| 1986 | -1% | 29% |
| 1987 | -16% | 22% |
| 1995 | -21% | 13% |
| 1998 | -16% | 8% |
| 2000 | -21% | 1% |
| 2001 | -18% | 6% |
| 2002 | 4% | 24% |
| 2008* | -18% | 7% |
| *upto 22nd January 2008, Gold prices as at 9:00 pm. IST. Source: Bloomberg |
At the launch, Devendra Nevgi, CEO and CIO of Quantum AMC Pvt. Ltd said that “With no entry loads during the NFO, the Quantum Gold Fund will be an ideal portfolio diversification vehicle, with liquidity available on listing on the NSE. Younger investors should certainly start investing in gold early- and regularly - in demat form to reap its benefits in the longer term. Gold tends to do well in any kind of financial market uncertainty – as it is now “
Quantum AMC is a direct-to-investor fund and forms are not available with all the mutual fund advisors. During the NFO, the forms for Quantum Gold Fund will be available at Quantum Asset Management Co. Pvt. Ltd (Mumbai), the offices of www.personalfn.com in nine cities across India and select branches of HDFC Bank, BNP Paribas, and Deutsche Investor Services
To know more about investing in the Quantum Gold Fund, please contact us at
Quantum Asset Management Company Pvt. Limited
Regent Chambers, #107, 1st Floor,
Nariman Point, Mumbai - 400 021
Tel: 022-22875923,
Fax: 022-22854318
Email: Info@QuantumAMC.com
Devendra Nevgi
CEO & CIO
Quantum Asset Management (Pvt.) Ltd.
Devendra@QuantumAMC.com