The scheme will utilise IFSCA-regulated, IIDI-insured vaults in Gift City
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Artha Bharat Investment Managers IFSC LLP has launched what it claims is Gift City’s first physical commodity fund and the first gold fund authorised by the International Financial Services Centres Authority (IFSCA), introducing a new structure that allows investors to redeem units either in certified physical gold bars or cash, marking a significant expansion of bullion-linked investment products at India’s international financial centre.
The Artha Bharat FinMet Physical Gold Fund will allocate at least 95 per cent of its corpus to LBMA-standard gold bars traded through the India International Bullion Exchange (IIBX) and held in IFSCA-regulated IIDI-insured vaults within Gift City. The scheme has been launched in partnership with Singapore-based precious metals specialist FinMet, which will act as investment adviser. A key differentiator of the fund is its physical redemption feature, allowing investors to opt for delivery of certified gold bars instead of cash settlement — a structure rarely seen in global commodity fund formats.
Investment Vehicles
The launch follows the IFSCA’s notification of commodity trading as a financial product in January 2026, a regulatory shift that has enabled fund managers in Gift City to structure commodity-linked investment vehicles under the IFSC framework. “Our scheme will invest in physical gold stored in IIDI-insured vaults within Gift City regulated by IFSCA. Another first is that investors will have the option to receive certified physical gold bars or equivalent cash upon redemption,” stated Sachin Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP, an IFSCA-registered fund management entity, manages multiple Category III alternative investment funds with assets of about $750 million.
The scheme will utilise IFSCA-regulated, IIDI-insured vaults in Gift City, offering segregated storage that the fund said provides diversification from traditional Western custodian networks. FinMet will provide advisory support on bullion sourcing, IIBX trading protocols, LBMA pricing and global central bank flows. The fund will offer weekly liquidity while maintaining institutional-grade custody standards.
The fund carries a total expense ratio of 0.65 per cent and will offer weekly subscriptions and redemptions, providing liquidity in a structure typically associated with financial assets rather than physical commodities.
New Category
The launch is also positioned as a potential catalyst for the India International Bullion Exchange (IIBX), which has struggled to build sustained institutional participation since its inception in 2022. While trading volumes at IIBX rose from 411 kg in FY23 to 92 tonnes in FY25, activity has reportedly weakened in FY26, with transactions largely driven by bullion imports rather than long-term investment flows.
Sawrikar said the fund introduces a new category of institutional participation at the exchange by holding gold as a financial asset rather than facilitating imports. “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,” he stated.
He added that the structure could encourage participation from family, offices, fund managers and institutional investors, potentially deepening Gift City’s role as a global bullion finance hub. Artha Bharat said gold continues to offer structural portfolio benefits, citing its low correlation with equities (0.02 with S&P 500), absence of counterparty risk, and long-term return profile. The fund noted that gold has delivered a CAGR of 13.7 per cent over 10 years, 20.4 per cent over five years, and about 20 per cent in the past year (as of June 30, 2026). It also highlighted that gold has compounded at 12.1 per cent annually since 2001, compared with the S&P 500’s 10.4 per cent total return over the same period.
Published on July 3, 2026
