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India’s Quantum Asset Management launches gold ETF

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Quantum Asset Management, a pioneer of direct-to-investor and low cost mutual funds in India, is launching its first commodity offering, the Quantum Gold Fund.

Quantum Asset Management, a pioneer of direct-to-investor and low cost mutual funds in India, is launching its first commodity offering, the Quantum Gold Fund. An open-ended exchange-traded fund, the Quantum Gold Fund will track the price of gold and is expected to be listed on the National Stock Exchange of India.

The fund aims to offer investors a cost-efficient and secure way to invest in gold without the inconvenience of holding and storing physical gold. It will closely track movements in the price of the underlying asset, physical gold of 0.995 fineness.

Quantum says the fund will be the be the first gold ETF in India without any front-end charge. During the opening offer period up to February 8 investors can subscribe to the scheme with a minimum investment of INR5,000 (USD127). Following listing on the National Stock Exchange, investors can acquire fund units through exchange broker members.

The underlying physical gold per Quantum Gold Fund unit is approximately equal to 0.5 grammes and represents the first time such a low-unit gold fund has been introduced in India.

‘Investors should consider investing in gold as insurance,’ says Quantum director Ajit Dayal. ‘We all buy life insurance in case something goes wrong so that our families are not affected by our personal absence. Gold is the insurance for your overall portfolio. Gold is a hedge, insurance, in one sense because it addresses the basic question: what if there is a global crisis and leaders are unable to handle it?

‘I encourage investors to invest anywhere between 5 per cent and 10 per cent of their total portfolio in gold. This does not mean that we dislike the Indian equity markets, but in the periods when stock markets declined, gold could have limited your overall losses.’

Quantum chief executive and chief investment officer Devendra Nevgi adds: ‘With no entry loads during the fund offer [period], the Quantum Gold Fund will be an ideal portfolio diversification vehicle, with liquidity available on listing on the National Stock Exchange.

‘Younger investors should certainly start investing in gold early – and regularly – to reap its benefits in the longer term. Gold tends to do well in any kind of financial market uncertainty – as it is now.’

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