In a significant move for commodity investors, HDFC Securities has introduced a Margin Trading Facility (MTF) specifically for Gold Exchange Traded Funds (ETFs). This allows eligible clients to use borrowed funds to amplify their investment in the precious metal, capitalizing on its strong performance in 2025.
How the Gold ETF Margin Trading Facility Works
The newly launched facility enables investors to take leveraged positions in gold as an asset class. HDFC Securities will fund up to 70% of the investment amount through MTF, subject to prevailing market and risk conditions. For example, if an investor wishes to purchase Gold ETFs worth ₹2 lakh, they can bring in ₹60,000 of their own capital and borrow the remaining ₹1.4 lakh.
Investors must pay an interest charge of 1% per month on the funded amount. The service is available on HDFC Securities' investing platform, HDFC SKY, accessible via both its mobile application and website.
Gold ETFs: A Top Performer in 2025
The launch comes at a time when gold ETFs have delivered impressive returns. Gold ETFs have surged by 72% so far in 2025, making them the second-best performer among widely traded assets, only behind silver which has gained 128%.
While the HDFC Gold ETF is part of this offering, the platform's MTF basket is extensive. It includes gold ETF schemes from other major providers such as SBI, ICICI Prudential, Tata, Kotak, Axis, Mirae Asset, Zerodha, UTI, and Groww. Funding levels for these typically range between 60% to 70%.
"The eligibility may change with risk and market conditions. This extended gold ETF basket provides investors with multiple options to access gold through a combination of diversified instruments and prudent leverage," stated HDFC Securities.
Risk Controls and Investor Advisory
HDFC Securities already provides funding for index, sectoral, and thematic ETFs under its Buy Stocks Pay Later (BSPL) framework. The company emphasized that standard MTF risk controls will apply to help investors manage their leveraged positions carefully during the permitted holding period.
The brokerage issued a clear advisory, urging investors to proceed with caution. "Investors are advised to carefully assess their risk appetite, understand MTF-related interest costs and terms, and read all relevant documents before availing the 'Margin Trading Facility'," it said. The company highlighted that leveraged investing can magnify both profits and losses, and is best utilized as part of a disciplined, long-term financial strategy.
Dhiraj Relli, MD and CEO of HDFC Securities, commented on the strategic rationale: "Gold continues to be a core allocation for Indian investors, both as a store of value and as a diversifier in volatile markets. By making HDFC Gold ETF available under the margin trading facility on HDFC SKY, we are giving our clients the flexibility to take calibrated, leveraged exposure to gold in a transparent, digital, and cost-efficient manner."
Gold ETFs offer a convenient, low-cost, and demat-based method to invest in gold, tracking its domestic price movements without the challenges associated with physical storage and security.
