ETFs are those schemes that are traded on exchanges like stocks. ETFs value is dependent on the NAV of the assets it stands for.  Usually, ETFs invest in pool of stocks and try to repeat a stock market index such as CNX Nifty or BSE Sensex, i.e. market sector like technology, energy, commodity such as petroleum or gold.

Lately, SEBI has amended its rules and permitted mutual funds to initiate gold exchange-traded funds (GETFs) in India.

A gold ETF unit is similar to mutual fund unit with gold as underlying asset and would be taken in demat form. An investor will get securities certificate offered by mutual fund backed by gold ETF explaining the ownership of specific amount of gold. These are designed to give investors the means for participation in gold bullion without actually taking physical gold. As gold being one of an important asset class, gold ETFs would give better and affordable means of investment as compared to other investment methods like gold coins, gold futures, bullion, or jewelry.