Mahaana Gold: A Digital Way to Own Physical Gold Without the Baggage

Gold has always held a strange place in Pakistani households.

Key points

• Add ProPakistani to Preferred Sources and see more of our stories in Google Search and Top Stories.
• Add as a preferredSource on Google Follow on Google News Join WhatsApp.
• The structure is built on Wakalatul Istithmar, where the investor appoints Mahaana as an agent to invest on their behalf for a disclosed fee.
• The management fee, up to 1.5%, accrues daily in the unit cost rather than being charged separately.
• Opening an account and investing takes regarding five minutes, with the actual transaction closer to 30 seconds, and initiating a withdrawal is just as quick.

Gold has always held a strange place in Pakistani households. It sits in almirahs and lockers as jewellery, passed down or purchased for weddings, valuable but rarely put to apply. Mahaana, the digital investment platform, is now betting that a lot of individuals would rather hold that value differently. The firm has rolled out Mahaana Gold, an IPO for units in the Mahaana Islamic Gold Fund (MIGF), an open end Shariah compliant scheme that invests in deliverable physical gold rather than a paper contract that merely tracks the cost of the metal.

IPO Terms and Timeline.

In practice, the offer opened with a minimum investment of Rs. 10, 000, and Rs. 5, 000 or more for any investment after that. The IPO closes on 10 September at 4: 00 PM, with subscriptions taken through the Mahaana app. Units will be allotted on 11 September at a single matter rate, and the offer size for this round stands at PKR 100 million, allotted first come, first served. There is zero front end load during the IPO window, with a front end load of up to 1.5% applying afterward.

How the fund is structured.

For context, the gold behind each unit is real. Mahaana buys deliverable physical gold through the Pakistan Mercantile Exchange (PMEX) and holds it in vault, so what backs an investor's units is metal, not a synthetic exposure to a cost. The fund itself is not held by Mahaana. The Central Depository Firm (CDC) acts as trustee and keeps the fund's assets separate from Mahaana's own balance sheet. It means the gold is not available to Mahaana's creditors and Mahaana simply manages the fund rather than holding the underlying asset.

Meanwhile, a small portion of the fund is kept liquid, in cash and Shariah compliant liquid instruments, so that redemptions can be processed without having to sell gold at short notice. The gold itself is valued at the close of every business day, and that valuation sets the unit cost, so an investor's holding has a published value that does not depend on asking anyone for a rate.

In practice, the structure is built on Wakalatul Istithmar, where the investor appoints Mahaana as an agent to invest on their behalf for a disclosed fee. Returns belong entirely to unit holders, and Mahaana is compensated for managing the fund rather than taking a share of the profit. The fund holds no interest bearing instruments, no conventional debt, and no non compliant securities, and cash is held in Islamic bank accounts. It is certified by SECP's Islamic Finance Department and, independently, by the Shariah Advisory Board led by Al Hilal Shariah Advisors. This person additionally review the fund's operations on an ongoing basis.

Though this is waived to zero during the IPO period, the fund charges a front end load of 1.5% on the amount invested at the time of purchase. The management fee, up to 1.5%, accrues daily in the unit cost rather than being charged separately. There is no back end load and no lock in on redemption, with one caveat: redeeming within 30 days of investing can trigger a back end load, a rule that applies throughout Mahaana's products and not just this fund. After 30 days, there is no charge for redeeming. Other costs, covering the trustee, custody, audit, and regulatory expenses, are set out in the Offering Document.

Investors can purchase units on any business day at that day's unit rate, starting with a first investment of Rs. 10, 000 and Rs. 5, 000 for every investment after that. To take funds out, an investor sends a redemption request through the app, and proceeds land in their registered bank account within six business days. Zakat and tax treatment are laid out separately in the Offering Document. Why Mahaana built it this way.

Shamoon Tariq, CEO and Founder of Mahaana Wealth, laid out the thinking behind the product on a recent podcast appearance, and his argument comes down to a simple question: why are you buying gold in the first place.

"You have to understand why you are buying gold, " he remarked. "If you are buying it for your wedding or for personal employ, obviously you have to go to a jeweller. In that case, you should not be investing in Mahaana Gold. But if you are saving in gold, investing for the future and so forth, then obviously Mahaana Gold is a much better option."

His case rests on a handful of practical challenges with buying gold the traditional way. Jewellery, he pointed out, is rarely 24 karat, and the weight quoted at the counter often includes stones and other materials that still obtain priced at the gold rate, even when they are something as ordinary as zirconia. Making charges are continued on top of that. Then there is the question of where the gold actually goes once you own it.

"You have to take custody of the gold yourself. You have to keep it at home or in a locker. Since purity remains a concern and security becomes the bigger matter once real savings are involved, whether the gold sits in a locker or at home, I don't need to tell you what happens if it gets stolen." Buying gold biscuits instead does not fully solve the difficulty either, he stated.

There is additionally a practical floor on how much gold a buyer can realistically purchase from a jeweller.

"You generally need to purchase a minimum lot of 10 grams. Anything below that has particularly limited availability. It means you need at least four to five lakh rupees to go and purchase gold from a jeweller." And since saving up that sum takes time, the rate of gold can move in the meantime, which eats into what that funds can eventually purchase.

Tariq described the alternative in plain terms: someone putting aside Rs. 5, 000 at a time can build a position in Mahaana Gold, and afterwards sell that investment to purchase physical gold at whatever the prevailing rate happens to be.

"Your investment compounds with the gold cost, but it doesn't come with the baggage of physical gold that you have to carry and store yourself. And if it gets stolen, you don't have to worry regarding that either." He offered a personal example to produce the point regarding how little physical gold actually gets employed day to day. "In my own home, my mother and my wife have gold, but it hardly ever gets applied. I have never really seen all that gold being applied."

His summary of the choice was straightforward: anyone investing for the long term should look at a gold fund, and anyone who actually wants jewellery should go to a jeweller. On liquidity and redemption timing.

Though still a fast one by fund standards, asked how selling units compares to selling physical gold, where a buyer can walk into a different shop the same day and cash out, Tariq acknowledged the fund works on a different rhythm. Once units are issued, an investor can sell them the particularly next day. It he argues beats the physical route since there is no jeweller to visit at all.

Opening an account and investing takes regarding five minutes, with the actual transaction closer to 30 seconds, and initiating a withdrawal is just as quick. The gap comes after that. Once a withdrawal request comes in, Mahaana sells the gold on PMEX and processes the proceeds through CDC, a settlement cycle that typically takes three to four days before the funds lands in the investor's bank account. Since the global gold rate is already available on PMEX in real time, so a sale is executed at that day's actual cost without any of the back and forth that comes with a shop, pricing itself is not something an investor has to chase down or negotiate.

Pressed on whether the fund carries the same ease of access that Mahaana has built its name on, Tariq did not hesitate, calling it a genuine extension of that convenience, with the only real wait being the three to four days it takes for settlement to clear.

Mahaana Gold is not pitched as a replacement for jewellery, and Tariq is upfront regarding that distinction. It is pitched as a way to hold gold as a savings instrument, priced daily, divisible into smaller amounts, free of making charges and purity questions, and without the security burden of storing metal at home. For a generation of savers who grew up watching gold sit unused in a locker, the pitch is less regarding the metal itself and more concerning what it represents: a way to hold value that does not ask you to additionally become its custodian.

Stay Connected with ProPakistani.

Obtain the latest business news, market insights, and economic updates wherever you prefer. Follow on Google Discover.

In short, mahaana Gold: A Digital Way to Own Physical Gold Without the Baggage is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.