- What is AZ Gold?
- How is the fund sharia complaint?
- Am I buying physical gold?
- How is the certificate price calculated?
- Buying and Selling
- How does this compare to the offline buying & selling of gold?
- Can I redeem physical gold?
- What are the risks?
- Who are the fund’s stakeholders?
What is AZ Gold?
AZ Gold is a sharia compliant mutual fund that invests in gold. The fund follows a passive investment strategy, whereby 100% of the money is invested in RJC “Responsible Jewellery Council” certified 24 karat gold, which is the official investment grade gold.
How is the fund sharia complaint?
The fund operates under the supervision of a Sharia committee to ensure the ongoing compliance of the fund’s investments with the principles of Islamic Sharia.
Am I buying physical gold?
Your investment is in certificates that are backed 100% by gold. However, you will not be getting the physical gold.
The mutual fund stores that gold at EGY Cash. EGY Cash shareholders are the Central Bank of Egypt, Ahly National Bank, Banque Misr and is responsible for cash transportation for Egypt’s biggest banks.
How is the certificate price calculated?
At the end of each day, the value of the gold owned by the fund is calculated based on the current day’s price of gold. This is divided by the total number of certificates issued by the fund, which determines your certificate price. This exercise is done by an FRA licensed company that is independent of the asset manager.
Where can I see the prices of gold?
Prices are based on local prices of Egyptian certified gold refineries. The EGX are to make the gold prices available on their website on the homepage. The data is provided by Gold Net Trading, a subsidiary of Evolve Holding, a company specialized in precious metals trading.
How many grams of gold are my certificates worth?
As per the Asset Manager, as a proxy, you can divide the total value of your certificates by the current price of gold to get an estimate of the number of grams of gold your investment is worth.
For example, if you are investing EGP 10,000 in AZG and the gold price as per the EGX is EGP 2,660 per gram of gold – this means you own 3.75 grams of gold (10,000 / 2,660).
How to place an order?
- Open the Thndr app
- Search for AZ Gold or find it under the mutual funds theme through your Explore tab
- Tap on AZ Gold
- Tap on Buy
- Set the amount of certificates or the amount of money you would like to subscribe with
- There is no minimum & you can buy as little as 1 certificate
Buying and Selling
Buy & sell orders can be submitted daily with a cut-off time of 11:30am on Mondays & Thursdays. Here’s what this means:
- You can place your order up until 11:30am on Monday & your order will be executed the following working day (on the Monday end of day execution price).
- If you place your order after 11:30am on Monday and before 11:30am on Thursday your order will be executed the following working day (on the Thursday end of day execution price).
There are no fees incurred at buying certificates. Fees only apply at selling & are applied on the initial investment price:
- This means that if you purchased EGP 1,000 worth of AZG certificates & the value of your investment goes up to EGP 1,100 at the time of selling, the fees are applied based on the EGP 1,000.
The fees are up to 4.9%, of which up to 1.5% (fund management, sponsorship, gold storage/custody, marketing and distribution) and up to 3.4% gold purchase cost (the premium of the gold bars).
If the certificate is sold after 3 years, no fees apply.
This is because the total fees amortize daily, over a period of 3 years. Here's how it works:
- If you sell after 1 year of ownership, you will be charged up to a 3.3% fee.
- If you sell after 2 years of ownership, they will be charged up to a fee of 1.6%.
- If you sell after 3 years of ownership, fees are already paid.
How does this compare to the offline buying & selling of gold?
The gold market’s smallest denomination is 0.25 gram, with an implied premium of 2.5%-3.5%) Common market practice is to pay a commission (premiums) when buying gold and to pay another commission when selling your gold (the difference between the buy price and the sell price). The average commission in the market is 2.5-4% when buying and 1-2% when selling, on average (may increase or decrease). This is usually embedded in the communicated gold bar price.
The fund fees covers storing the gold and insuring it, and the ease of access digitally within a regulated framework.
Can I redeem physical gold?
If you would like to redeem the physical gold, here’s how:
- Your total investment value in the fund needs to be equivalent to 50 grams of gold.
- There will be up to 5.5% fee paid to redeem the physical gold.
What are the risks?
Price volatility: Gold prices can be highly volatile, experiencing significant fluctuations over short periods of time. While gold is often seen as a safe-haven asset during times of economic uncertainty or geopolitical instability, it is important to note that gold prices can also exhibit volatility even in stable market conditions. This means that even when things are relatively stable, gold prices can still experience sharp declines or sudden drops, potentially resulting in substantial gains or losses for investors.
Local versus international gold price: There are three factors that would result into a delta between international gold price and local price
- Currency exchange risk: Fluctuations in currency exchange rates can affect the local price of gold when converted from international prices. Variations between official and black market exchange rates can impact the final local price of gold.
- Supply and Demand: The local supply and demand dynamics for gold can affect its price. Local factors such as jewelry demand, investment demand, availability of gold supply, and local production can influence the local price of gold
- Relative local economic outlook: The economic conditions and outlook of a specific country can also impact the local price of gold. Factors such as inflation rates, interest rates, economic growth, political stability, and investor sentiment can influence the demand for gold within the country.
Who are the fund’s stakeholders?
All of fund’s stakeholders are all regulated by the FRA
- Azimut Asset Management: Fully licensed asset manager by the FRA.
- Gold Net Trading “GNT”: FRA licensed gold trading provider
- EGY Cash: CBE owned storage facilitator and FRA licensed gold storage provider.
More About Azimut:
Azimut Egypt is one of the largest asset management companies in Egypt. With over 20 years of experience and whose Assets under Management exceed EGP 8.5 billion. They are the local investment arm of Azimut Group which operates in 18 countries around the Globe. Azimut Group manages around USD 70 billion in different asset classes.
More about Evolve:
Evolve Holding is an impact-driven investment company leading the development of a robust precious metals’ ecosystem in Egypt by providing alternative and innovative investment solutions that meet international standards and are delivered through compliant and secure channels.