MUMBAI (Commodity Online): A leading mutual fund in India has announced the launch of a unique gold savings fund which the company says will boost gold investment in exchanged traded funds (ETFs) the country.
Quantum Mutual Fund has filed an offer document with Securities and Exchange Board of India (SEBI) to launch Quantum Gold Savings Fund, an open ended fund of fund scheme. The new fund offer (NFO) price for the scheme will be Rs 10 per unit.
The company said that investment objective of the scheme is to provide capital appreciation by predominantly investing in units of Quantum Gold Fund - Exchange Traded Fund (QGF).
The scheme would allocate 90% to 100% of assets in units of Quantum Gold Fund with medium to high risk profile. It would further allocate up to 10% of assets in money market instruments, short-term corporate debt securities, CBLO and units of debt and liquid schemes of mutual funds with low risk profile.
Entry load charge will be nil for the scheme. The scheme will charge an exit load of 1.5% if exited before 1 year from the date of allotment. Quantum Mutual Fund is India's first dedicated, direct-to-investor mutual fund. Quantum Mutual Funds offers simple and easy-to-understand products.
The company is already running a Gold ETF named Quantum Gold Fund (QGF) offering investors an innovative, cost-efficient and secure way to invest in gold.
The QGF is an Open Ended Fund, which is listed on India's National Stock Exchange (NSE) and on the Bombay Stock Exchange (BSE) in the form of an Exchange Traded Fund (ETF) tracking domestic prices of gold.
The scheme enables investors to participate in the gold bullion market without taking physical delivery of gold, and to buy and sell units just like a stock on any of the recognized exchanges where it is listed.
Quantum said that Gold ETFs offer the best of both worlds. The investor has the advantages of owning physical gold, without incurring additional expenses and losses like making charges (for gold jewellery), and bank vault charges (for keeping coins or bars or jewellery), the company said.
If investors purchased gold from the retail jeweller or a bank, it would have cost at least a straight loss to the extent of the premium paid (which usually ranges from 5 to 20%), it said.
And there are no concerns of quality or theft- The gold backing the ETF is certified by the London Bullion Market Association and stored in vaults of the custodian / sub-custodians. The fund house takes care of all risks of storage and safety, Quantum added.