New inflows into gold FoFs halted by fund houses

Fri Oct 16 2026

The mutual fund industry, following verbal instructions from market regulator SEBI on Thursday evening, stopped fresh inflows into all gold fund of funds (FoFs) that invest in gold exchange-traded funds (ETFs), effective Friday. However, all gold ETFs offered by these fund houses will continue to be traded on the stock exchanges, several mutual fund officials told The Times of India.

Estimates show that the total industry size for gold ETFs is about ₹1.7 lakh crore, of which a third of the assets are through the FoF route. “ETFs are the mother ship, FoFs feed into that,” said a top fund manager.

Late on Thursday, Tata Mutual Fund announced temporary restrictions on lump-sum purchases, new systematic investment plans (SIPs) and systematic transfer plan (STP) registrations for Tata Gold ETF Fund of Fund, effective October 16, 2026.

The fund house also said that instalments under existing SIP/STP registrations made before the effective date would continue to be processed at the applicable net asset value (NAV).

During the suspension period, redemptions, switch-outs and existing systematic withdrawal plans (SWPs) would continue to be permitted, according to the fund house. It described the suspension as temporary.

Industry players believe that, given gold ETFs account for about 2% of the total mutual fund industry's assets under management, suspending inflows into gold FoFs is unlikely to significantly change demand for gold in India.

Recently, as the government sought to restrict gold imports—which drain the country's foreign currency reserves—it increased the import duty on gold to 15%, from approximately 7–8% earlier.

Source: https://timesofindia.indiatimes.com/