Equity mutual fund investors may now see gold investment in their portfolios due to revised SEBI guidelines, which permit equity funds to invest in gold and silver alongside their traditional investments in equity, debt, and cash.
Bandhan AMC is one among several fund houses to add gold to their equity portfolios. “Bandhan AMC is among the earlier ones to introduce gold into equity portfolios after SEBI’s revised guidelines, which now permit equity schemes to invest the residual portion of a fund in gold ETF, silver ETF, InvITs, and debt instruments subject to applicable ceilings,” says Sirshendu Basu, Head, Product Management & Strategy.
Bandhan AMC has nearly 73 funds, of which 16 are predominantly equity schemes, another 16 are debt-oriented, and 6 are hybrid funds. Gold exposure has been added to select schemes and includes Bandhan Flexi cap, Bandhan Small cap and Bandhan Aggressive Hybrid Fund.
Gold as an Investment
Historically, gold has served as a safe haven investment, yielding better returns during times of economic uncertainty and increased geopolitical risk. Gold’s recent high return of more than 65% in 2025 is a prime example. The present bull run in gold began in October 2022, and the price of gold has grown by more than 200%.
However, gold has also shown long periods of dormancy, especially during periods of high economic growth and a relatively steady economic and geopolitical environment.
Also, gold has shown high volatility in the past, with prices dipping nearly 50% after reaching all-time highs.
Fund Manager’s Strategy
Bandhan AMC aims to capture such opportunities as and when they arise in the gold market. “The allocation is opportunistic rather than standard, meaning it will vary depending on market conditions and fund manager conviction,” says Basu.
“This move is part of a broader strategy that also includes covered calls, Silver ETF and Invits, aimed at enhancing return potential while moderating volatility,” adds Basu.
Will Equity Exposure get Diluted
The addition of gold in equity schemes may not have a significant impact on the orientation of the fund. On February 26, Sebi introduced the revised note on Categorization and Rationalization of Mutual Fund Schemes. Under this, Sebi allowed mutual funds to invest the residual portion in gold and silver instruments along with other permitted securities, in their equity schemes categories. “This expanded toolkit gives fund managers greater flexibility to use commodities tactically without changing the core equity orientation of the fund,” says Basu.
What to do
Most financial advisors recommend a 10-15% exposure to gold via gold ETFs since they are transparent, closely follow physical gold prices, and are cost effective. Within equity funds, gold becomes another asset to be used best alongside other securities. “It also allows fund managers to capture opportunities in commodities where there may not be a suitable listed equity play. This helps improve risk-adjusted returns and makes portfolios more resilient,” says Basu.
Now, with Bandhan AMC taking a start, many other equity funds may soon announce adding gold to their equity schemes’ mandate, with varying exposure.
How this new equity-gold portfolio works, only time will tell. “Key takeaway is these enablers will act as a stabilizer and diversification tool, not a replacement for equities. Allocations will vary, so investors should review scheme documents to understand the extent of exposure. Overall, Bandhan AMC’s approach reflects a strategic effort to build more resilient portfolios by combining equities with commodities and other instruments to balance risk and return,” notes Basu.
Disclaimer: This article is for general awareness only and should not be construed as investment or financial advice. Returns on gold and equity investments are subject to market volatility. Past performance of gold or any other asset class is not indicative of future returns. Readers are strongly advised to consult a SEBI-registered investment advisor or financial professional before making any investment decisions.