What is the difference between Gold Exchange Traded Fund & Gold Fund?

Gold exchange Trade funds (ETFs) invest in Gold bars and hold them on a investor’s behalf. On the other hand in Gold Funds, the fund manager buys stocks and shares of those companies that produce Gold.. Gold ETFs were introduced in India in 2007 and yet to gain popularity. The prices of the Gold ETF’s are closely related to Bullion rates; however the same may or may not be applicable to Gold Funds. Thus, the prices of the Gold ETF and Gold Fund vary. Apart from this, the domestic movement of Gold affects the returns on Gold ETF, while in case of the Gold Funds; International Stock Price performance plays a very important role.