Invest in Gold In A Price-efficient & Liquid Way

Posted On Tuesday, Nov 02, 2021


As we have experienced the scale of the Pandemic and its potential impact on our investments, it may be a good decision to seek the risk-reducing and diversifying potential that Gold has to offer. What better occasion to stock up on your gold holdings than the auspicious occasion of Diwali. Indians have long upheld the tradition of buying Gold during Diwali due to its several properties.

• Ability to keep pace with inflation
• Long term Store of value
• Upholds value during macro-economic uncertainty

This Diwali, welcome the traditions albeit with a twist! Find the new way of investing in gold in an efficient way.

Gold ETFs - low cost and innovative way to play the yellow metal

Small but regular investments go a long way in creating wealth over time! Gold ETFs are exchange-traded funds that give you exposure to gold without having to purchase, store and resell the physical metal.

If you are concerned about a possible correction in the ongoing equity rally, you can consider the flexible, liquid and cost-effective way with Gold ETFs. Gold ETFs can be liquidated anytime and does not have any lock-in period.

Gold generally has a negative correlation with equities and ETFs could offer a strategic way to enter the Gold market, diversify your portfolio and help offset downside risks. Additionally, this gold financial form does not suffer from problems associated with physical gold such as paying hefty storage or locker charges and insurance premium.

Price Efficiency

For illustrative purposes, let’s assume gold prices are at Rs 45,000 per 10-gram. If you were to add making charges at 10% and GST and also the maintenance charges in term of locker and insurance charges, this would invariably increase the cost of buying gold.

Table 1: Gold Pricing Markups

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

For illustrative purposes only.

On the other hand, if you were to invest in a Gold ETF, you would have to pay less than 1% as annual expense ratio. Moreover, it would translate to better price efficiency due to the following reasons:

✔ No making charges or high premiums

✔ Gold ETFs transfer benefit of wholesale purchase prices to investors

✔ Benefit of GST credit at time of selling gold at the scheme level

✔ Fund takes care of the locker and insurance charges

✔ Traded close to the market price of physical gold, with a thin difference between buying and selling price

There are several advantages of investing in Gold through Quantum Gold Savings Fund or Quantum Gold Fund ETFs.

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

Regular Independent Purity Test for all Gold bars

Safely Stored in Accredited Professional Vaults

Use the Correction to build your Allocation

Take opportunity of the correction in Gold prices to invest in Quantum gold ETF and gradually build your gold allocation to form up to 20% of your investment portfolio. Investors 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 12 months of expenses’ in an emergency corpus with the Quantum Liquid Fund, you can then consider investing 20% of your portfolio to the risk reducing and portfolio diversifying asset of Gold with Quantum Gold 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 that the above suggested fund allocation only and is not to be considered as investment advice / recommendation, please seek independent professional advice and arrive at an informed investment decision before making any investments.

Asset Allocation Strategy

This Diwali, usher in the most 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 Scheme & Primary BenchmarkThis product is suitable for investors who are seeking*Risk-o-meter of Scheme
Quantum Liquid Fund

An Open Ended Liquid Scheme
• 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 Fund

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

• Investments in physical gold.
Quantum Gold Fund
Investors understand that their principal will be at Moderately High 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 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 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 Value Fund
Investors understand that their principal will be at Moderate 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 Sep 30, 2021.

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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