Nippon India Mutual Fund and ICICI Pru AMC joined HDFC Mutual Fund to impose temporary restrictions on investments in its gold-focused schemes, citing prevailing market conditions, and limiting scope for investors to park surplus funds in paper gold.
The restrictions, which will curb investors choice of diversification away from stocks and bonds, will take effect from June 8, 2026, for Nippon and June 5 for ICICI and remain in force until further notice.
Under the revised rules, direct fresh subscriptions to Nippon India ETF Gold BeES through the asset management company (AMC) will no longer be available to large investors. Previously, large investors could subscribe directly with the AMC for transactions exceeding ₹25 crore.
For Nippon India Gold Savings Fund, the fund house has imposed a cap on fresh investments, additional purchases, and switch-in transactions through lump-sum mode at ₹10 lakh per PAN per month.
Investments through Systematic Investment Plans (SIPs), Systematic Transfer Plans (STPs), and similar products will continue, subject to a limit of ₹50,000 per PAN per day.
The mutual fund clarified that the measures are temporary and will not affect redemption requests, switch-outs, or ongoing SIP and STP registrations.
On June 4, HDFC AMC announced restrictions on lump-sum subscriptions in HDFC Gold ETF and HDFC Gold ETF Fund of Fund. The restriction, to come into effect from June 8, will apply to investments of at least ₹25 crore.
For HDFC Gold ETF Fund of Fund, lump-sum purchases and switch-in transactions will be processed only up to ₹10 lakh per PAN per calendar month at the first-holder level.
Similarly, ICICI Pru AMC has announced the suspension of direct subscriptions exceeding ₹25 crore in the Gold Exchange Traded Fund (ETF) by eligible investors until further notice.
Analysts predict that such a move by the HDFC, ICICI and Nippon may prompt other fund houses to consider similar measures if strong inflows persist.
Gold ETFs in India, however, saw a net outflow of $61 million in May, the first since May 2025. This is a sharp reversal from the $297.2 million inflow recorded in April.
The bulk of the month’s redemptions came in the wake of the import duty announcement, which pushed domestic gold prices higher and created an opportunity for profit-taking.
Gold prices fell for a third consecutive month in May, declining 1.7 per cent after a 1.1 per cent drop in April and a steep 11.6 per cent fall in March.