Will your gold investments be impacted as HDFC, ICICI and Tata mutual funds stop fresh high-value ETF investments?

Major mutual fund houses such as HDFC Mutual Fund, ICICI Prudential Mutual Fund, Nippon India Mutual Fund and Tata Mutual Fund have introduced temporary restrictions on large investments into gold ETFs and related schemes.

For instance, HDFC, ICICI Prudential and Tata Mutual Fund have set a cap on direct subscriptions above Rs 25 crore, while HDFC and Tata Mutual have also restricted fresh lump-sum investments into their Gold ETF Fund of Fund to Rs 10 lakh per PAN card per month.

So, why are these mutual fund houses putting the break on large inflows? Will it affect your SIP and lump sum gold investments? What should the existing and new gold investors do, experts explain it all to ET Wealth Online:


Why are mutual fund houses putting restrictions on new large investments?

Feroze Azeez, joint CEO, Anand Rathi Wealth, says the restrictions have come at a time when there has been a sharp rise in investor demand for gold. Gold ETF inflows touched nearly Rs 69,000 crore in FY26, up 364% from the previous year, as investors turned to gold during a period of global uncertainty and increasing gold prices, says Azeez.

“Since Gold ETFs are backed by physical gold, fund houses need to procure additional gold whenever large inflows come in. With gold import duty rising from 6% to 15% and gold imports already under pressure, managing very large inflows has become more challenging for mutual fund houses,” says Azeez.

Prithviraj Kothari, president, India Bullion and Jewellers Association Ltd. (IBJA) says a high import duty on gold and falling rupee are the other two reasons why fund houses have taken such decisions.

“India's May 2026 duty hike raised gold import tariffs from 6% to 15%, roughly doubling the per-kg tax cost, while April 2026 gold imports fell to approximately 15 tonnes, near a 30-year low, creating a significant physical supply disruption. Additionally, the rupee hit a record closing low of 96.35 against the dollar in May, falling roughly 7% in 2026, Kothari explains.

Will it impact your existing SIP and lump sum gold investments?

Kothari says existing SIPs remain unaffected, and investors can continue buying and selling ETF units on stock exchanges.

The fund house has not imposed any restrictions on redemptions or existing investments; investors can continue holding units or redeeming them per existing scheme provisions, Kothari says, explaining the options available to gold investors.

Who will be impacted the most because of mutual fund houses’ restrictions?

Azeez says the impact is likely to be felt far more by the high net individuals (HNIs) rather than the retail investors.

“A retail investor investing through SIPs or making regular investments into gold, won’t see any impact. A Rs 25 crore investment is not very relevant for most retail investors, and even the Rs 10 lakh monthly limit on fresh investments is unlikely to affect most of them,” says Azeez.

What should new gold investors do amid mutual fund house restrictions?

Kothari advises new gold investors not to expect past returns when gold had rallied 74% in 2025 alone.

Kothari suggests new investors should adopt a calibrated and phased approach.

“Experts recommend a 10–15% portfolio allocation to gold, preferring disciplined monthly exposure via gold ETFs or gold funds through SIPs,” says Kothari.

Azeez recommends investors to continue sticking to their long-term strategy and asset allocation.

“They should not allow any short-term news and market movements to affect their investment course,” says Azeez.