Gold Exchange Traded Funds (Gold ETFs) track prices of gold. They invest and store gold on behalf of the investors, equivalent to the amount they have invested. SEBI regulations require Gold ETFs to buy gold as per the standards of London Bullion Markets Association (LBMA), which allows only bars with a purity of at least 99.5 percent (i.e. 24 Karat). Fund houses appoint custodians to handle the metal and custodians appoint an agency to store the gold in vaults. These ETFs charge an expense ratio that includes charges for storage and handling of the metal, and to insure it against any calamity.