Bharat FinMet Physical Gold Fund — Gift City’s first Physical Commodity Fund and the First Gold Fund Authorised by IFSCA in Gift City
GIFT CITY, GANDHINAGAR & Mumbai, 3rd July 2026:
Artha
Bharat Investment Managers IFSC LLP, a leading fund management entity in
India’s premier financial hub, has debuted the Artha Bharat FinMet Physical
Gold Fund — the first-ever physical commodity fund — and the first
gold fund to be launched from GIFT City. The launch of the fund follows IFSCA's
formal notification of commodity trading as a financial product under the IFSCA
Act, effective January 2026. This landmark launch will create a new milestone
following the enabling regulatory framework created by the GIFT City regulator.
Sachin Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP.
“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,” said Sachin
Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP.
Strategic Partnership & Investment Objective
The open-ended, passively managed fund is launched
in partnership with Singapore-based precious metals specialist FinMet,
who serves as the investment advisor. The scheme is designed to track
international spot gold prices with minimal tracking error, allocating at least
95% of its assets to London Bullion Association (LBMA) standard
gold bars traded on the GIFT City headquartered India International Bullion
Exchange (IIBX). IIBX is a JV of NSE, NSDL, CDSL, MCX and a BSE subsidiary.
The fund offers weekly subscriptions and
redemptions, providing investors with liquidity rarely available in physical
commodity-based fund structures. The Artha Bharat FinMet Physical Gold Fund also
has a highly competitive total expense ratio (TER) of 0.65% per
annum.
Unique Redemption & Secure Storage
“Our scheme will invest in physical gold stored in
IIDI (India International Depository IFSC) insured vaults within GIFT City —
regulated by IFSCA,” said Sawrikar. GIFT City’s first physical gold backed fund
also has another unique USP. “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,” added Sawrikar.
The Case for Gold: Performance and Diversification
With gold currently trading approximately 28% below
its January all-time high, Artha Bharat views this as a strategic entry point
for medium to long term investors. India has been one of the world’s top two to
three consumers of gold globally with conventional wisdom of the Indian
housewife urging investments into gold as a store of value and an insurance for
a rainy day. Gold has delivered exceptional returns to investors, with a CAGR of
13.7% over the last 10 years, 20.4% over the last 5 years, and an
impressive approximately 20% over the last year (as of 30 June
2026).
“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,” said
Sawrikar.
These three structural advantages are:
- Near Zero
Correlation: A 0.02 correlation factor with the S&P 500.
- No Counterparty Risk: The only international
reserve asset free from sovereign credit risk or sanctions exposure.
- Competitive Returns: Gold compounded at
12.1% p.a. since 2001, outperforming the S&P 500’s 10.4% total return
over the same period.
“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,” states
Sawrikar.
Global Expertise and Secure Custody
By utilizing IIDI-insured, IFSCA-regulated vaults,
the fund offers “strategic diversification” through segregated storage
independent of Western custodian networks.
FinMet brings a wealth of global bullion
network access, advising the fund on IIBX trading protocols, LBMA pricing, and
central bank activity. The scheme will offer weekly subscriptions and
redemptions, providing liquidity alongside institutional-grade security.
Catalysing India’s Gold Trading Ecosystem: The IIBX
Imperative
The Artha Bharat FinMet Physical Gold Fund is more
than a product launch, it is a deliberate act of ecosystem building. The India
International Bullion Exchange (IIBX), launched in July 2022 at GIFT City as
India’s first international bullion exchange, has struggled to establish sustained
trading volumes. After rising from 411 kg in FY2022–23 to 92 tonnes in
FY2024–25, volumes collapsed to barely 600 kg year-to-date in FY2025–26.
Critically, the activity that has driven IIBX to date has been almost entirely
commercial import-led, by jewelers with no meaningful participation by
institutional investment funds holding gold as a financial asset.
The Artha Bharat FinMet Physical Gold Fund will be
the first investment fund to hold physical gold on IIBX, introducing a new
category of participant and a qualitatively different source of demand:
long-term institutional investment flows rather than short-cycle import
transactions.
“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,” said Sawrikar.
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