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Posted On Tuesday, May 10, 2011
Consider this; you go to your jeweller to sell some old jewellery and are pretty sure that the ornament will fetch you a decent price. But, your jeweller offers you a price that has a huge discount factored in, giving you even lesser than the price you had paid much earlier while purchasing the jewellery. Shocked, you ask "Why?..." and are told that your old jewellery is not all gold, it lacks in purity.
While this may have (fortunately) not happened to you, low purity standards of gold jewellery in India is very much a fact. This has been proved by the often disappointing results of the surveys conducted by the Bureau of Indian Standards (BIS) surveys for gold purity checks. For the benefit of retail customers, the media regularly publishes reports on maintaining caution while purchasing physical gold.
However, recently, the fear of “purity concerns” has also extended to Gold Exchange Traded Funds (ETFs). Customer apprehension is understandable, and we have received queries voicing concerns regarding the purity of the gold backing Gold ETFs:
These are very valid questions to raise, considering the current inflationary conditions where an increasing number of people are looking towards gold as a store of value. At Quantum, we have tried to ensure that we address these concerns by sharing with you (many times in the past) the process that we actually follow for purchasing the gold that backs the Quantum Gold ETF. For the sake of a brief synopsis, allow me to reiterate that:
Now, even after a detailed explanation of the purchase process, and the fool-proof method of investing in Gold, it`s possible that you are still hesitant to believe in the purity of gold and the convenience of ETFs. Again, understandable!
And ofcourse we couldn`t leave the discussion without giving you an answer that you trust in. So, here`s what we did: to leave no scope for doubt that the gold held by Quantum Gold ETF on behalf of its investors is pure, we put all the gold bars that we hold under a "purity test".A first of its kind initiative by any Gold ETF in India! Even our vaulting agent who has been in the business of safekeeping and transporting precious metals since years was amazed to see this exercise being done for the first time.
This wasn`t as easy a task as it sounds though. To begin with, we had to search for a service provider who would understand our requirements, and as we were the first Gold ETF to want to pursue such a task, the search was quite exhaustive. We found a good support in Quantum Equipment Company Pvt Ltd, who carried out the purity tests at the vaults where the gold is stored. (We`re sure you must be wondering about the connection between Quantum Asset Management Company Pvt Ltd and Quantum Equipment Company Pvt Ltd. However, please note that there is no relation between the two companies. We share the same name by sheer coincidence!)
The gold assaying a.k.a purity testing was done using the Karatmeter Mistral, a precious metals analyzer machine. This method uses microspot XRF technology to determine the percentage of precious metal present. It is a fast, precise and non destructive method for Karat determination. The technology and machine was designed by a firm in Germany known as Bruker AXS Microanalysis GmbH - a worldwide leader for such analyzing technology and systems.
You would be pleased to know, and we would be glad to announce that all the gold held in Quantum Gold ETF has been tested and certified to be of 99.50 purity (0.995 fineness) and above. Here is the Assaying Certificate for your reference.
And in conclusion, just to let you know, we performed this test to assure you that what you own through the Quantum Gold ETF, is real and pure gold! Here, all that glitters is truly gold!
The views expressed in this article are the personal views of the Fund Manager of Quantum Gold Fund. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. This information is meant for general reading purpose only and is not meant to serve as a professional guide/investment advice for the readers. This article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments.
Statutory Details and Risk Factors:
Risk Factors: All Mutual Funds and securities investments are subject to market risks and there can be no assurance that the scheme`s objective will be achieved and the NAV of the scheme(s) may go up or down depending upon the factors and forces affecting securities markets. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return. Investment in mutual fund units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the Sponsor / AMC/ Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: 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 Investment Manager are incorporated under the Companies Act, 1956. Please read the Scheme Information Document (SID) /Key Information Memorandum (KIM)/ Statement of Additional Information (SAI)/Addenda carefully before investing. SID / KIM / SAI can be obtained at the Investor Service Centers of AMC or office of the AMC or on website www.QuantumAMC.com | www.QuantumMF.com
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