Flurry of gold funds aim to help wealth preservation in Iran

Wealth preservation would be considered to be among the main drivers for a recent spate of gold-related investment fund launches in Iran, with the IFN Investor Funds Database showing 11 such offerings over the past year.

With launches over the past 12 months making up almost half of total gold funds tracked, this figure contrasts sharply against three offerings in 2023 and two each in 2022, 2021 and 2018. Even starker, four funds were launched in a span of just five weeks in the third quarter of 2025.

Table 1: Iran’s gold investment funds by launch date

Source: IFN Investor Funds Database

This flurry of launches with four gold fund offerings in the latter half of December 2024 can be traced to key policy changes in relation to official foreign exchange rates within this Persian nation burdened under various economic sanctions imposed by several foreign governments.

According to the Central Bank of Iran’s (CBI) official exchange rate statistics, the local currency rial was pegged at IRR42,000 to the US dollar until the 30^th May 2024. The CBI official free float exchange rate thereafter saw the rial value fall to IRR369,959 to US$1 on the 31^st May 2024.

Chart 1: Official Iran rial 12-month exchange rate trend

While the CBI official exchange rate stood at IRR586,466 to US$1 on the 5^th October 2025, unofficial market rates have been roughly double at over IRR1.1 million instead – resulting in many local Iranians seeking ways to preserve their wealth valuations.

Reza Hosseinzadeh, business development head at Pasargad Capital – which launched the latest gold ETF – explained that with Iran’s limited avenues for foreign asset diversification, a local ETF helps keep savings onshore while still offering a commodity-linked hedge.

“In an environment of rial (currency) volatility and elevated inflation expectations, a gold ETF can be a practical hedge for households and institutions – particularly when used as a strategic allocation within a diversified portfolio.”

“Gold ETFs contribute to observable quotes that incorporate both global bullion dynamics and local currency conditions … improving convergence between retail transaction prices and the fair value implied by the underlying metal,” said Reza.

A more critical evolution is that of gold-backed ETFs providing regulated exposure to gold price movements without the frictions of sourcing, verifying, storing and insuring physical coins and bullion.

“For many retail and institutional investors, this lowers transaction costs and operational risk while enabling intraday liquidity and portfolio allocation alongside other listed assets.”

Reza said this trend is also endorsed by Iran’s Securities and Exchange Organization, which has steadily supported the expansion of fund structures beyond equities and fixed income – to broaden participation, enhance risk-return choices and encourage professionally-managed Shariah compliant savings channels.