Gold ETF FoFs: 17 Mutual Funds Restrict Fresh Investments Ahead Of Festive Season

Around 17 mutual fund houses have temporarily suspended fresh investments in their gold exchange-traded fund (ETF) funds of funds (FoFs), with the restrictions taking effect on October 15 and 16. The fund houses informed investors about the move through notices-cum-addenda but did not specify the reasons for the suspension.

Redemptions, systematic withdrawal plans (SWPs), switch-outs and systematic transfer plan (STP) outflows will continue during the suspension period, according to the notices.

Tata Mutual Fund said fresh and additional lump-sum investments, switch-ins, top-ups, and new systematic investment plan (SIP) and STP registrations in Tata Gold ETF FoF would be temporarily restricted from October 16, 2026.

“Please note that during this suspension period, Redemptions, Switch-out, existing Systematic Withdrawal Plan (SWP) will continue to be permitted in accordance with the terms outlined in the Scheme Information Document,” the fund house said in its notice.

The fund house added that the suspension was temporary and would remain in place until further notice. Instalments under existing SIP and STP registrations made before the effective date will continue to be processed at the applicable net asset value (NAV).

The restrictions come ahead of Dussehra and Diwali, a period when gold demand typically rises in India. The country relies heavily on imports to meet domestic gold demand, and a sharp increase in imports can widen the trade deficit and put pressure on the rupee.

Gold ETFs have also seen a sharp rise in investor inflows. According to data from the Association of Mutual Funds in India (AMFI), gold ETFs attracted net inflows of Rs 4,450.61 crore in September, up 71.4 per cent from Rs 2,596.70 crore in August.