Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Egypt Launches Gold Investment Funds to Offer Citizens Hedging Opportunities

Fri 26 Jan 2024 | 03:51 PM
By Ahmad El-Assasy

Egypt's Prime Minister Mostafa Madbouly has announced the launch of investment funds in metals, including gold, aiming to provide citizens with diverse investment and savings opportunities.

 This initiative, part of the state's economic reform efforts across various sectors, aims to hedge against price fluctuations through organized and secure investments.

During a presentation of a report by the Financial Regulatory Authority on the inception of Egypt's first gold investment fund, Madbouly highlighted that these funds are a response to the public's demand for unconventional investment opportunities to preserve the value of their money. 

This move also aligns with the state's policy to empower the private sector and attract more investments, connecting the Egyptian market with global markets.

The Financial Regulatory Authority's chairman, Mohamed Farid Saleh, stated that the establishment of the gold investment fund is in line with government efforts to enhance financial and investment inclusivity. 

The fund represents the first step towards creating a series of precious metal investment funds intended to yield suitable returns for different societal segments.

The gold fund aims for direct investment in physical gold (bullion), with its value tracking the gold price index announced by the Egyptian Exchange (EGX). 

The subscription for the az-Gold fund began in May, managed by a specialized company, allowing investments starting from a minimum of 100 units at EGP 100 ($3.2) each during the initial subscription phase.

Saleh also mentioned that the fund's establishment was facilitated by new regulatory frameworks for metal funds, contributing to a more inclusive and growth-stimulating non-banking financial sector.

This innovative approach to gold investment allows small-scale investments without a maximum limit, ensuring dealings in certified gold and reducing acquisition costs, such as manufacturing fees typically charged by traders. 

Moreover, it provides secure storage for investors' gold, safeguarded against theft or damage, managed by entities registered with the Financial Regulatory Authority.

Investing in the gold fund involves opening an account with the distributing company, transferring the desired investment amount, and signing the investment form, enabling investors to convert their money into gold investment certificates. 

Investors have the flexibility to redeem their investment, along with any profits, at any time or receive an equivalent amount of gold as per the fund's prospectus.