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Gold Webinar

Chirag Mehta, Sr. Fund Manager, Alternative Investments & Ghazal Jain Associate Fund Manager, Alterative Investments at Quantum Mutual Fund share insights about potential of Gold and look at the key reasons for the dip in Gold prices, what does 2021 hold for Gold and what investors need to do right now.

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Gold Webinar

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  1. GOLD;DON’TDISCOUNTTHISPRECIOUSMETALYET. Speakers: ChiragMehta,SeniorFundManager,AlternativeInvestments GhazalJain,Associate Fund Manager,Alternative Investments April 16,2021

  2. Gold hadoneofitsbestrunseverin2020thankstoheightenedrisksparkedbyCovid-19+monetary andfiscalpandemicrelief • Breakthroughsin vaccinedevelopmentsinceNovember,alongwithoptimismof economicrecovery, however,sentgoldpriceslower • Sincethestartof2021,goldhasbeenunderfurtherpressureasthe dollarandUSbondyieldshave strengthened • Gold’sfallin2021hasbeensurprisingconsideringpassingof freshCovid-19reliefof$1.9trillionin theUS • Theresultingdollardebasementshouldhavesentgoldrallying.Buttheoppositeseemstohave • happenedso far • Pricesaresupportedasthe FederalReservehasassuredmarketsofno changein its accommodativemonetarypolicy AQuickRecap..

  3. Thisisin spiteofrisingyieldswhichshouldideallyresultin lowerassetprices S&P500 Bitcoin RiskAssetsareRallying.. Dataasof13thApril2021 Source:Investing.com

  4. 5ReasonsWhyYouShouldn’tDiscountGoldYet

  5. Risk&Uncertainty

  6. OneYearOn, ThePandemicLingersOn.. Newwaves andvariantsof Covid-19continuetotake atollonGlobalEconomicRecovery

  7. Vaccine Rollout–ASlowStart

  8. Boththedollarandbondyieldshavestartedtoclimbdownfromtheirmulti-monthpeaksreachedinMarchBoththedollarandbondyieldshavestartedtoclimbdownfromtheirmulti-monthpeaksreachedinMarch 10-YearUSTreasuryYield USDollar HasGoldFinally Bottomed? Dataasof13thApril2021 Source:Investing.com

  9. Yields

  10. TheFederalReservehasalotofincentiveforstemmingsurgingTreasuryyieldsTheFederalReservehasalotofincentiveforstemmingsurgingTreasuryyields • Nominalyieldsin the UShavebeenon the riseexpectinghigherinflationtotriggertaperingbythe FederalReserve • Butthe centralbankhasdeniedanytaperingin itsbondbuyingorhikeininterestratesanytime soon.Thebankwantsto seeinflationabove2%beforeunwinding • Risingyieldsincreaseborrowingcostsforcompaniesandconsumerswhichcouldputadentin the economicrecovery • Equitymarketscouldreactnegativelytohigheryieldsaspluggingahigherinterestratetodetermine long-termcash flowsresultsinlowervaluationsfor moststocks • Risinginterestratesalso increasethe debtburdenfor governments • Goingforward,itispossiblethattheFederalReservemay optforYieldCurveControlandimpose interestrate capsonlongermaturitybonds. Thus,wedon’texpectarunwayincreasein yieldsbeyond 2% YieldCurveControlon TheHorizon

  11. ThoughhighernominalratesarecreatingheadwindsforGold,partofthiswillbeoffsetbyinflationThoughhighernominalratesarecreatingheadwindsforGold,partofthiswillbeoffsetbyinflation Gold’sSensitivitytoRealInterestRates Despitetheirrecentincrease,nominalinterestrateremainhistoricallylow&realratesacrossdeveloped marketsremainnegative.ThismeansnonyieldingGoldhaspotentialtoperformwell.

  12. Lackofyieldonfiatcurrenciessupportsgold 2250 12 2000 10 1750 8 1500 6 NegativeRatesmakeHoldingGoldmoreAttractive 1250 4 USD % 1000 2 750 0 500 -2 250 -4 0 -6 1995 2000 USRealinterestrate 1970 1975 1980 1985 1990 2005 2010 2015 2020 Goldprice DataasofMarch2021 Source:Bloomberg

  13. Rising Debt & CurrencyDebasement

  14. Valueoffiscal stimulusmeasuresasashareofGDP GovernmentstooDoleoutTrillionsofDollars ofFiscalStimulus Source:TradingEconomics.com Source:Statista DataasofMarch2021

  15. In A Bid to Boost the Pandemic Stricken Economy, Governments have RunUptheirDebtstoUnsustainableLevels Globaldebt levelssoar to second World War levels Mediandebt-to-GDPratioofcountrygroupingbased onG20advancedandG20emergingeconomies; Data ason:December 2020.Sources:FinancialTimes,IMFhistoricaldebtdatabase

  16. Relentlessmoneyprintingbycentralbanksunderminesconfidenceinfiatcurrencies,benefittinggoldRelentlessmoneyprintingbycentralbanksunderminesconfidenceinfiatcurrencies,benefittinggold $Trillion 60 10 55 9 8 7 6 5 50 45 CentralBanksonAPrintingSpreetoBuyGovernmentDebt 40 35 %toGDP 30 4 3 2 1 25 20 15 10 0 5 0 US-FED JAPAN-BOJ EU-ECB CHINA-PBOC 199219941996199820002002200420062008201020122014201620182020 DataasofMarch2021 Source:Bloomberg

  17. 1600 1400 USMoneySupplyM2 Goldprices 1200 1000 800 600 400 200 GoldisaMonetaryAsset–Goldhaskeptupwithmoney supplygrowth Rebased=100 0 197419761978198019821984198619881990199219941996199820002002200420062008201020122014201620182020 DataasofDecember2020 Source:Fred Pastperformance mayormaynotsustained infuture

  18. Weaknessandfallingconfidencein the dollartendsto strengthengold Rising Deficits&DebtintheUSareMaking theDollar Vulnerable DataasofSeptember2020 Source:fred.stlouisfed.org DataasofDecember2020 Source:fred.stlouisfed.org

  19. Inflation

  20. 27% HigherInflationisonitsWay Gold willbeapreferredassetasitgenerallymovesinlinewith inflationandhaspotentialtopreserve purchasingpower DataasofDecember2020 Sources:LouisFed,lynalden.com DataasofFebruary2021 Source:Bloomberg

  21. INRDepreciation

  22. TheIndianrupeehasbeenappreciatingsince startof 2021,hurtingINR goldprices Theappreciationintherupeewasprimarilydueto a positiveeconomicoutlookfor Indiaandrobust fund flowsinIndianequitiesbyFIIs Theflowsseemtobeslowingdownorreversing nowwiththesecondwaveofCovid-19striking Indiaand hurtingits economicoutlookwith resultingpartiallockdowns.Inaddition,theRBI’s QuantitativeEasinghasalsoputpressureonthe currency Thecurrencycouldnow bebacktoitsgradual depreciatingtrend, givingapushto domesticgold prices INR isBacktoit’s DepreciatingTrend Dataasof13thApril2021 Source:Investing.com

  23. GoldShouldbeBackonTrackAfteraBadFirstQuarter

  24. ForInvestorswhoalready have10-15%allocationto Gold For Investorsyettoallocate 10-15% toGold SuggestedActionPlan • Stay put and watch gold play a risk-reducing, return enhancing role for your portfolio • Prices havefallen from 2020 highs, it’s a good time to build your allocation • Invest 50% lump sum right now tobenefit fromlower prices,and staggerandaccumulate the remaining50% over thenext6 months Pleasenotethattheaboveisthesuggestedfundallocationonlyandisnottobeconsidered asinvestmentadvice/recommendation. Pleaseseekindependentprofessionaladviceandarriveataninformedinvestmentdecisionbeforemakingany investments.

  25. SolutionstomeetSustainableDevelopmentGoals:SGD-17 = “SMILE” + WHATISSMILE? THESMILESTORY OUTCOMESOFAR SMILE was born out of our desire to support credible NGOsandcreateasteady stream of money flow for them Since2018,QuantumMF investors have supported 7 NGOs from diverse sectors via the SMILE facility SMILEenablesQuantumMF investorstocontribute10% of their investment in eligible schemes to charities vetted byHelpYourNGO

  26. INVESTINSMILEFACILITY QLongTermEquityValueFund QEquityFundofFunds QDynamicBondFund QMultiAssetFundofFunds QGoldSavingsFund Q LiquidFund DONATETONGO’S DONATIONRECEIPTS SMILEProcessFlow HelpYourNGOsends donationreceiptsand80G Liaiseswith NGOgrantees Monitors &reviews Donatedto NGOs selectedbyinvestors andvettedby HelpYourNGO Investorsreceiveperiodic programreportsfromHelpYourNGOontheNGOssupported bythem

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  30. The data in this presentation are meant for general reading purpose only and are not meant to serve as a professional guide/investment advice for the readers. This presentation has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. Quantum AMC shall makemodificationsandalterationstotheperformanceandrelateddatafromtimetotimeasmay be requiredasperSEBIMutualFund Regulations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. None of the Sponsors, the Investment Manager, the Trustee, their respective Directors, Employees, Affiliates or Representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the data/information/opinions contained in this presentation. The Quantum AMC shall make modificationsandalterationstotheperformanceandrelateddatafromtimetotimeas mayberequired. Pleasevisit–www.QuantumMF.comtoreadschemespecificriskfactors.InvestorsintheSchemearenotbeingoffereda guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk 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. 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. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956. 16thApril2021 Mutualfund investmentsaresubjecttomarketrisks,readallschemerelateddocumentscarefully. Disclaimer– TermsofUse

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  32. Appendix

  33. GlobalMarket-MovingThemes Accommodative FederalReserve + Expanding VaccineRollout+ FreshroundofUS FiscalStimulus Strengthening Dollar + Dent in Economic Recovery+Taper Tantrum in Equity Markets Rising GovernmentDebt +HigherInflation Expectations Lingering Pandemic + Long RoadtoRecovery RisingBond Yields

  34. NEAR TERMWEAKNESS • Reduced safe haven appeal – worst of thepandemicisbehindus+expanding vaccinerollout • Risingyields –increasetheopportunity • costofholdingnonyieldinggold • Stimulusandreflationtradefuelingstock markets • Surgingdollarbenefittingfromoptimism about US economic recovery and rising yields • INRappreciation • MEDIUM-LONGTERM STRENGTH • Risinginflationarypressuresduetopent updemand+stimulus • Even thoughyieldsarerising,theyare • stillathistoricallylowlevels • Stockmarketvulnerabilitytocentral bankpolicytapering • Risingdebtanddeficitinthe USto reducedollar’sappeal • Reverttolongterm trendofINR depreciation What’s MovingGold

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