Artha Bharat Investment Managers has introduced a physical gold fund at GIFT City, marking the first such vehicle under the new IFSCA commodity trading rules. The fund invests in LBMA-standard gold bars via the India International Bullion Exchange, offering investors choices between cash or physical delivery.
What Happened
Artha Bharat Investment Managers IFSC LLP has launched the Artha Bharat FinMet Physical Gold Fund, becoming the first entity to offer such a product from GIFT City. This launch follows new regulations from the International Financial Services Centres Authority (IFSCA) that, as of January 2026, allow commodity trading to be treated as financial products within India's international financial services center. The fund is designed as an open-ended, passively managed scheme that allows investors to subscribe to or redeem units on a weekly basis.
How The Fund Works
The fund primarily invests at least 95% of its total assets into LBMA-standard gold bars. These gold bars are traded on the India International Bullion Exchange (IIBX), which was established in 2022 to centralize and regulate international bullion imports. The physical gold held by the fund is stored in vaults managed by the India International Depository IFSC (IIDI). A unique feature for investors is the choice to receive their redemption value either in cash or through the delivery of physical gold bars.
Why This Matters For GIFT City
This fund is a significant step in the effort to move GIFT City beyond banking and insurance into a broader range of financial products. By using the IIBX infrastructure, this fund aims to shift the focus of bullion holdings from purely trade-related imports to a regulated financial asset class. The collaboration with Singapore-based investment adviser FinMet is intended to bring international standards to this domestic initiative, potentially increasing institutional interest in the IIBX platform.
Investment Context and Risks
For investors, the primary appeal is the ability to hold gold in a transparent, regulated environment that offers the option for physical delivery. However, because this is an international fund, investors must be aware of currency fluctuations and the specific regulatory framework of the IFSC, which differs from domestic Indian market regulations. While the fund utilizes insured vaults for security, participants should track the liquidity and subscription volume on the IIBX, as these factors will determine how easily investors can enter or exit the fund. Furthermore, as this is a new type of financial product under updated 2026 rules, the operational track record of the fund is still being built.
What Investors Should Track
Investors interested in this development should monitor the fund’s subscription uptake and the total volume of gold managed through the IIBX platform. The key monitorable will be the efficiency of the physical delivery process for those opting for gold bars rather than cash, as well as any future updates regarding the fund's expense ratios and operational transparency as more institutional participation develops in the GIFT City ecosystem.