You can no longer invest in Gold ETF FoFs! These changes have come into effect today..

Gold Investment: Several mutual fund houses have temporarily halted new investments into Gold ETF Fund of Funds (FoFs). This restriction has come into effect today, October 16. Fund houses including ICICI Prudential Mutual Fund, HDFC Mutual Fund, Aditya Birla Sun Life Mutual Fund, Invesco India Mutual Fund, DSP Mutual Fund, Tata Mutual Fund, and Shriram Mutual Fund have issued notices to investors regarding this development. Following this restriction, investors will no longer be able to make new lump-sum investments, initiate new SIPs (Systematic Investment Plans), or 'top up' existing SIPs in these Gold ETF FoFs. In some cases, 'switch-in' transactions and the registration of new Systematic Transfer Plans (STPs) have also been suspended.

What do these notices say?

In its notice, Shriram Mutual Fund stated that these restrictions have been imposed in accordance with SEBI directives, as communicated through AMFI (Association of Mutual Funds in India). However, no specific reason has been provided. The fund house noted that, effective October 16, new lump-sum investments, new SIP registrations, and 'step-ups' (increasing the investment amount in existing SIPs) will not be permitted.

In a notice dated October 15, DSP Mutual Fund stated that any applications received after the 3:00 PM cut-off time on October 15 may be rejected, and the funds will be returned to the investors.

According to a report by the news agency Reuters on October 15, several major Indian mutual fund houses—including Kotak Mahindra Mutual Fund, UTI Mutual Fund, and HDFC Mutual Fund—have issued notices to halt bulk subscriptions (large, one-time investments) into Gold ETFs. Ban Imposed Just Before Dussehra-Diwali

The restriction on investments in Gold ETF Fund of Funds (FoFs) has been imposed just ahead of Dussehra and Diwali—a period when the demand for gold typically rises. A Gold ETF FoF is a type of mutual fund scheme that invests its capital into Gold ETFs. According to a report by the news agency Reuters, investments in Gold and Silver ETFs saw an increase during the festive season last year, driven by a growing interest in these precious metals as returns from the stock market remained weak. In contrast, demand has been somewhat sluggish this year; gold imports into India fell from $2.3 billion in August to $1.8 billion in September.

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