Subbu's Solution

Dear Subbu, I am a regular investor in the Quantum Gold Mutual Fund scheme. I intend to have gold as part of my portfolio all the time. Recently the govt has announced the Gold Bond Scheme and it looks really interesting? What do you think about the same? Will Quantum Gold team buy these bonds? If it is not in the mandate, I would advise that you consider modifying the mandate in order to allow people like me to invest in one scheme and get the benefit of exposure to both investment avenues. Regards, Sharat - Sharat Chandra
Dear Sharat, thank you for trusting us with your investments. At Quantum we always encourage our investors to have at least 10-20% of their investments in gold as means to diversify portfolio. To answer your question, the Gold Bonds are not yet issued by the government. RBI will start issuing them on 26 November, 2015. It is only after it is issued that the regulator - SEBI will take a call whether it will be allowed for investments under Gold ETFs. The Gold Bond scheme is restricted for sale as there is an annual cap of 500 grams per person, therefore even if the fund invests, it will be a negligible proportion of the fund’s total assets.
However in my view and with my experience with investors I think investors especially in India invest in gold ETFs essentially because it is backed by the physical gold and not backed by Sovereign Guarantee. Although the returns profile may be better in a Sovereign gold bond as compared to gold ETF, it eventually would be reliant on a government guarantee.

Product Label

Name of the SchemeThis product is suitable for investors who are seeking*Riskometer
Quantum Gold Fund

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

• Investments in physical gold

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


Subbu's Solution is authored by I. V. Subramaniam. I. V. Subramaniam is a director of Quantum Asset Management Company Private Limited. The responses expressed here are strictly for information and explanation purpose only. The responses are meant for general reading purpose and not to be considered as an investment advice / recommendation. The responses are not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or units of the Mutual Fund. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in the responses.

Risk Factors: 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 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. 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.

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