Here's a New Low-Cost Way to Invest in Gold

Posted On Tuesday, Dec 21, 2021


Though Gold prices may have corrected from their historic highs, we believe that its long-term potential still holds good. Gold has played a strategic role in an investor’s portfolio especially during times of macro-economic uncertainty. This becomes more relevant amidst new variants of the current pandemic and concerns surrounding global inflationary pressures that have triggered sharp swings in the equity markets.

Fundamentally Strong Gold

During the Covid-19 triggered equity markets crash in March 2020, many investors sold equity mutual funds due to the market fall and rushed to invest in gold. This is because Gold generally has a negative correlation with equity and played the important role of being a source of liquidity and potential to limit the downside risk for all who those who had diversified their investments to a combination of assets.

With equity markets witnessing a correction currently, investors have increasingly realised that allocation to gold is essential for diversification, and which may help to minimize downside risks.

The fundamentals that propelled gold prices last year still hold valid that include:

• Rising deficits and debt
• Low interest rates
• Currency debasement due to excess liquidity

In addition, rising inflation is now another reason to invest in gold.

The fundamentals along with its long-standing cultural significance warrants an allocation to the yellow metal during these uncertain times. Investing through Gold ETFs translates to better price efficiency as illustrated below.

Table 1: Gold Pricing Markups

ComponentsGold Rate (24K) Rs.
24 K Plain Gold45,000
Making Charges @ 10%4500
Sub Total49,500
GST @ 3%1485
Grand Total50,985

For illustrative purposes only.

As you see in the table above, there are making charges including GST. On the other hand, if you were to invest in a Gold ETF, you would have to pay the scheme’s annual expense ratio that is annually upto 1%. Moreover, Gold ETFs can be liquidated anytime during market hours and does not have any lock-in period.

5 Reasons to Invest in Quantum Gold Fund ETF

Backed by physical gold of 99.5% purity

Efficient market linked prices

Invest in small denominations -0.01 grams of Gold

Regular Independent Purity Test for all Gold bars

Safely Stored in Accredited Professional Vaults

Usher in the Gold the innovative Way

This Season, find a low cost and innovative way to invest in the yellow metal.

That’s right! Quantum Gold Fund ETF now offers you the option to invest in gold using smaller denominations.

How Does this Work?

The face value of Quantum Gold Fund ETF has been changed from Rs.100 to Rs.2, effective December 17, 2021. Accordingly, each unit now approximately represents 1/100th of 1 gram of gold. Earlier, Quantum Gold Fund ETF NAV representing ½ gram of Gold has changed to 1/100th of a gram for 1 unit of Gold.

 Old structureNew structure
Face ValueRs100Rs 2
Each unit represents0.5 grams of gold0.01 grams of gold

For instance, the NAV of Gold ETF on December 17 was Rs. 2107.29 representing ½ gram of Gold. With the face value change, each unit is representing 0.01 gram of gold and thus the NAV as of Dec 20 was Rs. 41.84!

With the rising gold prices, minimum investment in QGF was on the higher end, because of higher face value, as each unit was backed by ½ gram of physical gold, thus leading to high NAV. With the change in face value, the NAV of the fund has changed, making it more accessible for investors. Now investors can invest in Quantum Gold Fund ETF with smaller denominations.

Should The Lower NAV be A Cause for Concern?

Absolutely Not. Please be assured that your existing investment in Quantum Gold Fund ETF is not affected by this change.

The NAV per unit of Quantum Gold Fund has been reset to reflect the change in the Face Value per unit and the balance unit holding of the existing unit holders of the scheme has increased proportionately effective from the Record Date i.e. December 17, 2021. The change in the Face Value does not impact the current value of your investments in Quantum Gold Fund.

Use the Opportunity to Grow Your Allocation

Take the opportunity of the smaller denominations to invest in Quantum gold ETF and you can gradually grow your gold allocation to form up to 20% of your investment portfolio. You can use our simple 12-20-80 Asset Allocation Strategy that offers the benefits of diversification and reduced downside risks.

After setting aside money equivalent to around 12 months of expenses’ in an emergency corpus using a Liquid scheme such as Quantum Liquid Fund, you can then consider investing 20% of your portfolio to avail the potential of risk reducing and portfolio diversifying asset of Gold with Quantum Gold Fund ETF.

You can also invest using a monthly SIP (Systematic Investment Plan) of Rs.500 without having the need to open a DEMAT account with the Quantum Gold Savings Fund.

Thereafter, you can invest the balance 80% in a diversified equity bucket comprising of Quantum Long Term Equity Value Fund, Quantum Equity Fund of Funds and Quantum India ESG Equity Fund.

Asset Allocation

Please note the above is suggested fund allocation only and not an investment advice / recommendation.

Asset Allocation Strategy

This Season, usher in the innovative and price-efficient way to invest in gold with the Quantum Gold ETF or Quantum Gold Savings Fund.

Watch our latest Mega webinar video on Asset Outlook & the Economic View in the Current Market Scenario where Chirag Mehta, Senior Fund Manager, Alternative Investments, give you further insights into how to invest in Gold.

Product Labeling
Name of the SchemeThis product is suitable for investors who are seeking*Risk-o-meter of Scheme
Quantum Long Term Equity Value Fund

An Open Ended Equity Scheme following a Value Investment Strategy
• Long term capital appreciation

• Invests primarily in equity and equity related securities of companies in S&P BSE 200 index
Quantum Long Term Equity Fund
Investors understand that their principal will be at Very High Risk
Quantum Equity Fund of Funds

An Open Ended Fund of Funds scheme Investing in Open Ended Diversified Equity Schemes of Mutual Funds
• Long term capital appreciation

• Investments in portfolio of open-ended diversified equity schemes of mutual funds registered with SEBI whose underlying investments are in equity and equity related securities of diversified companies
Quantum Equity Fund of Funds
Investors understand that their principal will be at Very High Risk
Quantum India ESG Equity Fund

An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme
• Long term capital appreciation

• Invests in shares of companies that meet Quantum's Environment, Social, Governance (ESG) criteria.
Quantum India ESG Equity Fund
Investors understand that their principal will be at Very High Risk
Quantum Liquid Fund

An Open-ended Liquid Scheme. A relatively low interest rate risk and relatively low credit risk.
• Income over the short term

• Investments in debt / money market instruments.
Quantum Liquid Fund
Investors understand that their principal will be at Low Risk
Quantum Gold Savings Fund

An Open Ended Fund of Fund Scheme Investing in Quantum Gold Fund
• Long term returns

• Investments in units of Quantum Gold Fund – Exchange Traded Fund whose underlying investments are in physical gold
Quantum Gold Savings Fund
Investors understand that their principal will be at Moderately High Risk
Quantum Gold Fund

An Open Ended Scheme Replicating / Tracking Gold
• Long term returns

• Investments in physical gold
Quantum Gold Savings Fund
Investors understand that their principal will be at Moderately High Risk

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
The Risk Level of the Scheme in the Risk O Meter is based on the portfolio of the scheme as on November 30, 2021.

Potential Risk Class Matrix - Quantum Liquid Fund
Credit Risk →Relatively LowModerate (Class B)Relatively High (Class C)
Interest Rate Risk↓
Relatively Low (Class I)A-I  
Moderate (Class II)   
Relatively High (Class III)   

Disclaimer, Statutory Details & Risk Factors:

The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

Mutual fund investments are subject to market risks read all scheme related documents carefully.

Please visit – to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk 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. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

Above article is authored by Quantum.

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