Can an investment fund allow investors to walk away with physical gold bars? In GIFT City, that idea has moved from concept to structure. A new gold fund set up within the IFSC ecosystem is built around Bullion Depository Receipts (BDRs), which represent actual gold stored in regulated vaults.Unlike a traditional gold ETF that only tracks prices and settles in cash, this structure keeps gold fully backed in allocated form and adds a unique feature — investors can choose to redeem their holdings in physical gold or cash.The fund is restricted to non-resident investors, including institutions, family offices, and high-net-worth individuals, and is designed as a long-term allocation product with optional physical delivery.Sachin Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP, tells the bussinessline about the mechanics of the fund:How does the Artha Bharat FinMet Physical Gold Fund actually work?The biggest distinction is that the fund is built around the IFSC bullion ecosystem rather than direct physical bullion holdings. The fund invests almost entirely in Bullion Depository Receipts (BDRs), which represent underlying gold held within the GIFT City framework. We have then built a redemption-in-kind mechanism over this structure, allowing investors to receive physical gold by extinguishing the underlying BDRs. To our knowledge, this combination of BDR-based exposure with investor-level physical redemption is among the first of its kind.The fund is exclusively for non-resident investors. It caters to institutional investors, family offices, and high-net-worth individuals. Since Indian tax residents are not eligible, it operates entirely within the non-resident investment universe, under IFSC regulations.What is the minimum investment and typical ticket size?The minimum investment is $150,000, which comes down to $50,000 for accredited investors. Our target investors are those looking for meaningful allocations to physically backed gold, not small speculative exposure — but structured, long-term holdings with the option of physical redemption.How is physical delivery operationalised within GIFT City? Can investors take delivery only within IFSC vaults or outside India as well? Operationally the investor first opeans an account with IIDI. The fund then transfers the relevant BDRs into the investors’ account. The investor extinguishes those BDRs to take physical gold within the GIFT City vault network or through the global delivery route. We facilitate and coordinate the process through the relevant depositary vault, exchange, and logistics arrangements. This remains subject to operational feasibility, documentation applicable law and the redeeming investor bears the associated costs. Can investors actually take delivery of small quantities of gold?Physical redemption is available in 100-gram units, which is the minimum delivery denomination. If an investor’s holding does not match full 100-gram multiples, the remaining portion is settled in cash. So investors receive physical gold where possible, and cash for residual balances.