India’s international financial hub, GIFT City, has achieved a major milestone in its journey to becoming a global bullion investment destination. Artha Bharat Investment Managers IFSC LLP has introduced the Artha Bharat FinMet Physical Gold Fund, making it the first physical commodity fund and the first gold fund to be launched from GIFT City under the regulatory framework of the International Financial Services Centres Authority (IFSCA). The launch follows the implementation of new regulations that recognized commodity trading as a financial product from January 2026.
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Artha Bharat Thanks IFSCA for Enabling Innovation
Commenting on the launch, Sachin Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP, said:
“We are grateful to the International Financial Services Authority for working with the industry to develop a robust regulatory framework that rewards and encourages innovation in product offering that will help establish GIFT City as the preeminent IFSC of the region.”
He added that the new regulatory framework has opened the door for innovative investment products that can strengthen GIFT City’s position as a leading international financial centre.
Fund to Track International Gold Prices
The open-ended and passively managed fund has been launched in partnership with Singapore-based precious metals specialist FinMet, which will serve as the investment advisor. The scheme aims to closely replicate international spot gold prices by investing at least 95 percent of its assets in London Bullion Market Association (LBMA) standard gold bars traded through the India International Bullion Exchange (IIBX).
The fund will offer weekly subscriptions and redemptions, providing investors with greater liquidity than many conventional physical gold investment products. It also carries a competitive total expense ratio (TER) of 0.65 percent per annum.
Investors Can Redeem Physical Gold or Cash
Highlighting one of the fund’s key features, Sawrikar said:
“Our scheme will invest in physical gold stored in IIDI (India International Depository IFSC) insured vaults within GIFT City — regulated by IFSCA.”
He further added:
“Another first with our scheme is that investors will have an option to receive certified physical gold bars or equivalent cash when they wish to redeem their units in the scheme.”
This feature makes the fund one of the few investment products in India to offer investors the flexibility of taking delivery of physical bullion.
Why Artha Bharat Remains Positive on Gold
The company believes current market conditions present an attractive opportunity for medium- and long-term investors. While gold is trading around 28 percent below its January all-time high, the metal has continued to generate strong long-term returns.
According to Artha Bharat, gold has delivered a 13.7 percent compound annual growth rate (CAGR) over the last 10 years, 20.4 percent CAGR over the past five years, and approximately 20 percent returns over the last year as of June 30, 2026.
Gold Offers Three Structural Advantages
Explaining why gold remains an essential portfolio asset, Sawrikar said:
“Gold offers three structural advantages that make it indispensable in any portfolio: near-zero correlation with equities, freedom from counterparty and sanctions risk, and competitive long-run returns.”
The company highlighted the following advantages:
- Near-zero correlation with equities, with a correlation factor of 0.02 against the S&P 500.
- No sovereign credit, counterparty, or sanctions risk.
- Long-term annualized returns of 12.1 percent since 2001, outperforming the S&P 500’s 10.4 percent total return during the same period.
Gold Plays a Critical Role During Market Stress
Sawrikar also emphasized gold’s defensive role in diversified portfolios, stating:
“Gold stood firm in 2022 when bonds and equities fell simultaneously, challenging the traditional 60/40 framework. Gold is the genuine third leg of a resilient portfolio, not a bond substitute.”
The company believes these characteristics make gold an effective hedge during periods of market uncertainty.
Boosting Institutional Participation in IIBX
Beyond launching a new investment product, Artha Bharat aims to strengthen activity on the India International Bullion Exchange (IIBX). The company noted that while IIBX has largely been driven by commercial gold imports since its launch, the new fund will become the first institutional investment vehicle to hold physical gold through the exchange.
Sawrikar said: “IIBX was built to be world-class infrastructure for gold trading and storage, regulated, transparent, and LBMA-standard. But infrastructure only realises its potential when it has sustained utilisation. Our fund will be the first institutional investment vehicle to use IIBX and IIDI vaults not for import, but for holding gold as a long-term financial asset. We hope this catalyses other fund managers, family offices, and institutional investors to follow, and in doing so, fulfil the original vision of GIFT City as a global hub for gold finance, not merely a conduit for jewelry imports.”
A Milestone for India’s Bullion Investment Ecosystem
With institutional-grade storage, international bullion standards, weekly liquidity, and optional physical gold redemption, the Artha Bharat FinMet Physical Gold Fund represents an important milestone for India’s regulated precious metals market. Industry observers believe the launch could encourage further innovation in commodity-based investment products while strengthening GIFT City’s ambition to become a global bullion finance centre.
Activating the Trading Ecosystem at IIBX
This launch represents a deliberate effort to build up the local financial ecosystem. Launched originally in July 2022 as India’s premier international bullion exchange, the IIBX has faced difficulties maintaining steady trading volumes. Volumes initially climbed from 411 kilograms in fiscal year 2022–23 to 92 tonnes in fiscal year 2024–25, before dropping sharply to just 600 kilograms year-to-date in fiscal year 2025–26.
Crucially, prior exchange activity was almost entirely driven by commercial jewelry imports, lacking participation from institutional funds holding the metal as a core financial asset. The Artha Bharat FinMet Physical Gold Fund changes this dynamic by becoming the very first investment fund to hold physical gold on the IIBX. This introduces long-term institutional investment flows rather than short-cycle commercial import transactions.
Management notes that while the IIBX was designed as a world-class, transparent platform, infrastructure requires sustained utilization to achieve its full potential. By utilizing the exchange and IIDI vaults for long-term asset holding rather than retail importing, the fund aims to catalyze other managers, family offices, and institutional players to participate, fulfilling the original vision of GIFT City as a global hub for gold finance.
About Artha Bharat
Artha Bharat Investment Managers IFSC LLP is one of the largest fund management entities operating from GIFT City and registered with the International Financial Services Centres Authority (IFSCA). It manages the Artha Global Opportunities Fund, Artha Global Multiplier Fund and the Artha Bharat Absolute Returns Fund that are registered with the International Financial Services Centres Authority (IFSCA), GIFT City as Category III Alternate Investment Funds. The 750 million dollar IFSCA registered FME is promoted by XLRI alumnus and CFA charter holder Sachin Sawrikar, who brings over 30 years of global fund management experience.
FAQs
1. What is the Artha Bharat FinMet Physical Gold Fund?
It is the first IFSCA-approved physical gold fund launched from GIFT City, investing primarily in LBMA-standard physical gold traded through IIBX.
2. Who manages and advises the fund?
The fund is managed by Artha Bharat Investment Managers IFSC LLP, while Singapore-based precious metals specialist FinMet serves as the investment advisor.
3. Can investors receive physical gold when redeeming their investment?
Yes. Investors have the option to receive certified physical gold bars or the equivalent value in cash upon redemption.
4. Where will the fund’s gold be stored?
The physical gold will be stored in insured India International Depository IFSC (IIDI) vaults within GIFT City under IFSCA regulation.
5. Why is this fund significant for GIFT City?
It is the first institutional physical gold fund launched under the IFSCA framework and is expected to boost participation in the India International Bullion Exchange while supporting GIFT City’s growth as an international bullion finance hub.
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