Mutual funds bar fresh investments in Gold ETF FoFs. What are the rules for existing SIP investors?

Seventeen mutual fund houses have temporarily stopped accepting fresh investments in their gold exchange-traded fund-of-funds (FoFs) from October 15–16, 2026. The restrictions cover new lumpsum investments, switch-ins and registrations for systematic investment plans (SIPs) and systematic transfer plans (STPs) in specified schemes.

HDFC Mutual Fund, Kotak Mahindra Mutual Fund, Tata Mutual Fund and ICICI Prudential Mutual Fund are among the 17 fund houses that have announced the restrictions to their unitholders through a notice-cum-addendum. The restrictions are temporary and will remain in force until further notice, according to the notices cited in reports.

According to distributor platform Creso, fund houses began sending out notices-cum-addenda on the evening of October 15, 2026, closing the door to new money in their gold funds. Creso further said that the market regulator Sebi has not issued any public circular on this.


Also Read | HDFC, Kotak, ICICI Prudential among 17 mutual fund houses to temporarily restrict subscriptions in gold ETF FoFs

Which gold mutual fund investments are affected by the restrictions?

The restrictions apply to specified gold FoFs, which invest in gold exchange-traded funds (ETFs) and provide investors with exposure to gold through the mutual fund route. These restrictions include some funds such as Kotak Gold Fund, Kotak Gold Silver Passive FoF, Tata Gold ETF Fund of Fund and ICICI Prudential Gold ETF FoF.

Investors will not be able to make fresh or additional lumpsum investments or register new SIPs and STPs in the affected schemes. Switch-ins from other mutual fund schemes are also restricted.

Some fund houses have specified additional limitations. Kotak has included step-ups in existing SIPs, while Tata has restricted top-ups. ICICI Prudential has also specified restrictions on certain transfer-ins under its Income Distribution cum Capital Withdrawal (IDCW) plan. Investors should check the latest addendum issued by their respective fund house for the exact restrictions applicable to their scheme.

The Creso platform said that HDFC, Tata, DSP, Invesco and Zerodha describe the restrictions as temporary or state that they will remain in force until further notice. ICICI Prudential and Aditya Birla Sun Life say fresh subscriptions are “discontinued” and do not mention an end date. None gives an end date. The June 2026 gold curbs, by comparison, involved a Rs 10 lakh monthly cap rather than a complete halt.

What happens to existing SIPs in gold FoFs?

In their notices-cum-addenda, the fund houses said that during the suspension period, redemptions, SWPs, switch-outs and STP-outs would continue. Existing SIP instalments registered before the restrictions took effect can continue, subject to the conditions specified by the respective fund house.

Kotak, Tata and ICICI Prudential have stated that existing SIP instalments will continue to be processed at the applicable net asset value (NAV). However, investors should distinguish between continuing their existing SIPs and increasing their contributions.

While existing instalments may continue, new SIP registrations and certain top-ups or step-ups are not permitted under the applicable restrictions. Investors should review their existing instructions and the terms outlined in their fund house’s notice.

Gold FoF restrictions: Can investors still withdraw money?

The restrictions do not amount to a blanket freeze on existing investments. Redemptions and switch-outs remain permitted under the applicable scheme terms. Tata Mutual Fund has explicitly stated that redemptions, switch-outs and existing systematic withdrawal plans (SWPs) will continue.

Investors who already hold units in the affected schemes can therefore continue to access their investments in accordance with the relevant scheme rules. HDFC, Tata, Invesco and Zerodha explicitly allow redemptions, switch-outs and SWPs. The other notices do not specify restrictions on withdrawals.

Can investors still buy gold ETFs?

Investors can continue to purchase gold ETFs through stock exchanges using a demat account, as the restrictions announced so far concern specified gold FoFs rather than exchange-traded gold ETF units.

However, investors should exercise caution before purchasing ETFs on the exchange. Strong demand can cause an ETF’s market price to trade above the value of its underlying holdings.

Before investing, check the indicative net asset value (iNAV) and compare it with the ETF’s prevailing market price. Buying at a substantial premium could expose investors to losses if the premium narrows.

Also Read | NFO Insight: Carnelian Small Cap Fund opens for subscription with Rs 5,000 crore size cap. Can it deliver alpha?

What should investors do now?

Investors who already have SIPs running in the affected schemes should first check their fund house’s notice rather than assume that all transactions have been stopped. Existing SIPs and redemptions generally remain permitted, while new investments and certain increases in contributions are restricted.

Those looking to initiate a fresh investment in gold should also review their overall portfolio allocation before choosing an alternative route. The restrictions do not necessarily indicate a change in gold’s long-term investment role, but investors should avoid making decisions solely in response to recent price movements or temporary supply constraints.

According to the reports available, the current restrictions concern specified gold FoFs. Pure silver funds and multi-asset funds have not been covered by the restrictions reported so far, although investors should verify the latest scheme notices before making any transaction.

Were similar restrictions imposed before?

The Creso platform said that there had been two softer episodes in the previous year, both initiated by fund houses themselves, and one older case in which the RBI indirectly restricted gold fund purchases.

In February 2013, the RBI reiterated that banks should not grant any advance for the purchase of gold in any form. In October 2025, Kotak, UTI, SBI, Axis, Tata, Aditya Birla Sun Life and Groww paused lumpsum investments in their silver ETF FoFs and reopened them within about two weeks.

In early June, HDFC, ICICI Prudential, Nippon India, Tata, Axis and Aditya Birla Sun Life capped fresh money in gold ETFs and gold FoFs. Direct ETF orders of Rs 25 crore and above were refused. Gold FoF lumpsum investments and switch-ins were capped at Rs 10 lakh per PAN per month. SIPs were left unaffected. The curbs were lifted around August 21 as pressure on the rupee eased.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

If you have any mutual fund queries, message ET Mutual Funds on Facebook/Twitter. We will get them answered by our panel of experts. Do share your questions at ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.