Gold prices were highly volatile in September. Gold prices
fell below $750 an ounce and then bounced backed to
above $900, during the month. The US financial crisis and
its global impact, drove more and more investors towards
the safe haven asset. Their frantic purchases saw gold
post its biggest one day gain.
Gold prices continued to trend downwards, through the
first half of September 2008. The US Dollar gained against
the Euro on account of signs of weakness in the euro-zone
economy. Responding to this, gold prices fell below $750
an ounce - the longest slump it has witnessed in eight
years. Gold prices fell 28% from their record highs in
March, primarily due to the US Dollar rising 15% ( from its
July lows ) versus the euro.
Gold prices started recovering, given the increasing credit
turmoil in the US and strong physical demand driven by
lower prices. The US credit crisis worsened with adverse
developments viz - Lehman Brothers filing for bankruptcy,
Merrill Lynch & Co., hurt by $52.2 billion in losses,
agreeing to a $50 billion takeover by Bank of America
Corp; and AIG being virtually taken over by the US
Government.
Gold prices continued to gain on account of buying from
investors as a protection against the credit crisis and
financial turmoil, which started spreading to other parts of
the world viz., the U.K and other European countries. Gold
prices increased by 7.23% in US dollar terms during the
month. However, in the domestic markets, prices
increased by 14.85%, The higher rise in the domestic
markets, was on account of rapid depreciation in the
Indian rupee. The Rupee depreciated by more than 7%
during the month. The NAV of Quantum Gold Fund
increased by 14.88% during the same period.
The US financial crisis and the resulting global impact
doesn't seem to be showing any signs of receding. There is
still a lot of uncertainty in the financial markets. Gold is an
asset which is invulnerable to default. Gold has an intrinsic
value and is a proven monetary asset. In such uncertain
times, gold is a "must-have" asset class and helps investors
to gain some protection amidst the turbulence in the
financial markets.. Therefore, it would be prudent for
investors to increase their investments in Gold.
Statutory Information and Risk Factors: Investment Objective: QLTEF’s investment objective is to achieve long-term capital appreciation. QLF’s investment objective is to provide optimal returns with moderate levels of risk and high liquidity. QGF’s investment objective is to generate returns that are in line with the performance of gold, subject to tracking errors. The principal investment objective of Quantum Index Fund (QIF) is to invest in stocks of companies comprising the S & P CNX Nifty and endeavour to achieve a return equivalent to Nifty by “Passive” Investment. Asset Allocation: QLTEF will primarily invest in Equity and Equity related securities, but may invest in money market instruments to meet liquidity needs. QLF will invest in Money Market and other short term debt instruments having maximum repricing tenor of one year. QGF will primarily invest in physical gold and if allowed under SEBI Regulations, also in gold related securities, but may invest in money market instruments to meet liquidity needs. QIF will predominantly invest in stocks constituting the S & P CNX Nifty but may invest in money market instruments to meet liquidity needs. Terms of Issue: QLTEF is an open-ended Equity Scheme offering Growth and Dividend Plans. The units can be subscribed/redeemed at the applicable load, on all business days during the continuous offer. QLF is an open-ended Liquid Scheme offering Growth, Daily Dividend Re-investment and Monthly Dividend Payout Plans. The units can be subscribed /redeemed at the applicable NAV, subject to applicable load, on all business days during the continuous offer. QGF is an open-ended Exchange Traded Fund. Each unit of QGF will be approximately equal to the price of half (1/2) gram of Gold. Units will be issued at NAV based prices.On an ongoing basis direct purchases from the Fund would be restricted to only Authorised Participants and Eligible Investors. Direct purchase from the Fund by retail investors is not permitted. Units of QGF can be bought/sold like any other stock on the National Stock Exchange of India Ltd. (NSE) or on any other stock exchange where it is listed. QIF is an open- ended Exchange Traded Fund. Each unit of QIF will be approximately equal to 1/10th (one tenth) of the S& P CNX Nifty. Units will be issued at NAV based prices. On an ongoing basis direct purchases from the Fund would be restricted to only Authorised Participants and Eligible Investors. Direct purchase from the Fund by retail investors is not permitted. Units of QIF can be bought/sold like any other stock on the National Stock Exchange of India Ltd (NSE) or on any other stock exchanges where it is listed. Entry Load: Nil in case of QLTEF, QLF, QGF and QIF. Exit Load: in case of QLTEF : On redemption/switchout within 6 months of allotment- 4%, after 6 months but within 12 months- 3%, after 12 months but within 18 months-2%, after 18 months but within 24 months-1%, after 24 months-Nil. In case of QLF and QIF: Nil. In case of QGF: Nil in case of Authorised Participants; 0.5% in case of Eligible Investors. Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsors: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited (AMC). The Sponsor, Trustee and the Investment Manager are incorporated under the Companies Act, 1956. Risk Factors: Investments in mutual funds are subject to market risks including uncertainty of dividend distributions and the NAV of the schemes may go up or down depending upon the factors and forces affecting the gold and securities markets and there is no assurance or guarantee that the objectives of the schemes will be achieved. The past performance of the Sponsor has no bearing on the expected performance of the scheme. Quantum Long-Term Equity Fund, Quantum Liquid Fund, Quantum Gold Fund and Quantum Index Fund are the names of the schemes and do not in any manner indicate either the quality of the Schemes, their future prospects or returns. Scheme specific risk: QLTEF, QLF, QGF and QIF are the first equity, liquid, gold and Index schemes being launched by the AMC. The AMC has no previous experience in managing equity, liquid, gold or index schemes. Equity and Equity related instruments are by nature volatile and prone to price fluctuations due to both macro and micro factors. QLF proposes to invest the portfolio in debt and money market instruments. The QGF’s NAV will react to the Gold price movements. The Investor may lose money over short or long period due to fluctuation in Scheme’s NAV in response to factors such as economic and political developments, changes in interest rates and perceived trends in bullion prices, market movement and over longer periods during market downturns. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of these investments of the QLTEF, QLF, QGF and QIF. Please read the Offer Documents of QLTEF, QLF, QGF and QIF before investing. Offer Documents/Key Information Memorandum/Application Forms are available at the Quantum AMC Office at 107, Regent Chambers, Nariman Point, Mumbai-400021. It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Offer Documents for QGF and QIF have been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the said Offer Documents. The investors are advised to refer to the Offer Documents of QGF and QIF for full text of the ‘Disclaimer Clause of NSE’. ”S& P” and Standard and Poor’s” are trademarks of the McGraw-hill Companies, Inc (S & P) and have licensed for use by India Services & Products Ltd in connection with the S& P Nifty Index. “ The Product is not sponsored, endorsed sold or promoted by India Index services & Products Limited (“IISL”) or Standard & Poor’s , a division of The McGraw –Hill Companies, Inc ( “S & P “) regarding the advisability of investing in securities generally or in the product. Please read the full Disclaimer in relation to the S& P CNX Nifty Index in the Offer Document/ Prospectus /information Statement of QIF”.
