Choice Mutual Fund on Friday announced the launch of its new Gold Exchange-Traded Fund (ETF) — the Choice Gold ETF, an open-ended scheme designed to replicate or track the domestic price of gold. The New Fund Offer (NFO) opened for subscription this week and will remain open until October 31, 2025.
Following the NFO period, the ETF will be listed on both the BSE and NSE within a week, allowing investors to buy and sell units on the exchanges just like shares. The fund seeks to generate returns in line with the performance of physical gold in India, subject to tracking error. The minimum investment amount during the NFO is Rs 1,000, with no upper limit.
The Choice Gold ETF will be managed by Rochan Pattnayak, Chief Investment Officer at Choice Mutual Fund. The fund house said the product aims to offer investors a convenient, secure, and cost-efficient way to gain exposure to gold without the challenges of physical storage.
“Gold ETFs give investors an efficient means to participate in the gold market, offering liquidity, transparency, and regulatory protection,” Choice Mutual Fund said in its statement.
Choice Mutual Fund is sponsored by Choice International Limited, a diversified financial services group headquartered in Mumbai. The group operates across multiple financial domains and holds regulatory memberships with SEBI, RBI, IRDAI, and leading Indian stock exchanges.
Rising interest in gold investments
The launch comes at a time when investor appetite for gold is surging. Prices of the yellow metal have hit new highs in 2025, recently crossing Rs1.2 lakh per 10 grams, driven by geopolitical tensions, inflationary pressures, and global market uncertainty.
Data shows that gold ETFs in India have delivered returns exceeding 50% over the past year, with some funds offering annual gains of nearly 60% ahead of Diwali 2025. Despite a mild post-festival correction, demand remains robust, supported by a long-term positive outlook for gold as a hedge against inflation and currency depreciation.
How Gold ETFs work
When investors buy units of a gold ETF, the fund manager uses the pooled funds to purchase standardised 1 kg gold bars with 995 purity, adhering to the Good Delivery standards of the London Bullion Market Association (LBMA) — the global benchmark for gold quality and purity.
The physical gold purchased is stored securely in vaults located within India, under the custody of third-party custodians. Major vaults for Indian gold ETFs are based in Mumbai and Ahmedabad. Importantly, all holdings remain within Indian borders; none of the gold is stored abroad, according to mutual fund disclosures.
Regulatory oversight
Gold ETFs are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI Mutual Fund Regulations, 1996, ensuring investor protection and compliance. These ETFs are domiciled in India and traded on domestic exchanges such as the NSE and BSE.
As per SEBI norms, at least 95% of a gold ETF’s portfolio must remain invested in gold or gold-related instruments, while up to 5% may be held in cash or equivalents to manage liquidity. Some funds may also invest a small portion in Exchange Traded Commodity Derivatives (ETCDs) backed by physical gold, which are also regulated and domiciled in India.
Investor takeaway
With the launch of Choice Gold ETF, investors gain another avenue to participate in gold’s long-term growth story — combining the safety of a tangible asset with the flexibility of a market-traded instrument.
At a time when gold continues to shine as a preferred hedge amid global uncertainty, the new ETF offers investors a digital, liquid, and SEBI-regulated route to include the metal in their portfolios without the risks of physical storage.
Disclaimer: Business Today provides market and personal news for informational purposes only and should not be construed as investment advice. All mutual fund investments are subject to market risks. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.