Egypt’s Financial Regulatory Authority approved the establishment of the nation’s first fund to invest in gold, enhance financial and investment inclusion, and build an advanced non-banking financial sector that is inclusive and stimulates economic growth.
What is a gold investment fund?
The Gold Investment Fund is a license granted by the FRA to a company to sell gold investment documents backed by gold reserves through dealing with companies that buy, sell, store and secure gold savings.
The company must be licensed by FRA, as this guarantees for the customer the highest levels of trust, transparency and protection of his gold savings.
According to Ahmed Abul-Saad, an expert in fund management and stock portfolios, the steps to invest in gold investment documents are as follows:
1- Open an account and submit a purchase request with the recipient parties, including Azimut Egypt for managing funds and securities portfolios, and a number of securities trading companies.
2- Money transfer.
3- The recipient parties transfer the money into az-gold documents
Steps to recover investment documents in gold:
1- Submit a refund request to the aforementioned recipients.
2- Determine the cash or in-kind refund.
3- Refund and settlement within two working days for liquidation.
4- Receipt of gold with a minimum of 50 grams.
Gold investment fund details
According to Abul-Saad, the recipient parties convert the capital of the subscribers in the documents into gold, by dealing with companies licensed to perform buying and selling activity, and registered with FRA.
The documents which can be bought and sold online through recipient companies- among these being brokerage companies in the trading of securities- guarantee the highest levels of safety.
The FRA requires gold insurance by Egyptian companies registered in the authority’s records to practice insurance activity.
This guarantees the highest rates of safety for customers, as well as attracting the largest segment of those wishing to save, as the price of the document starts from LE10.
Why has the fund been launched now?
Abul-Saad explained that the launch of the gold investment fund now comes in light of the desire of many people to invest in gold with their inability to buy in light of high prices, as the fund made the document available starting from 10 pounds.
It also aims to secure financial solvency for those who wish to invest in gold, from carrying cash or gold, and exposure to fraud or theft, as well creating an organized alternative to the traditional gold market.
According to FRA, resolution #50 of 2023 authorized the Board of Directors of the Minerals Investment Fund, or the Committee to Supervise the Fund’s Business, to seek the assistance of any of the registered mineral preservation service providers.
The resolution also obligateS the fund’s investment manager to deal in minerals by buying and selling through entities registered in the FRA’s records, and taking into account the controls set by the authority.
The fund aims to provide the authority with a copy of the contract concluded between it and the aforementioned service providers, without prejudice to their obligations in this regard.
The ‘minerals-az’ fund aims to achieve appropriate returns for investing in various precious metals in accordance with the investment policy of each tranche, which allows immediate investment with high liquidity and low cost.
The fund aims to invest in gold (via physical investment in bars), so that the net asset value of the fund is calculated on the basis of the gold price announced by the Egyptian Stock Exchange.