India Eases Fund Rules for Metals
India's market regulator has updated its rules to allow the country's actively managed equity funds to increase their investments in gold and silver. The change could allow the $384 billion sector to further diversify portfolios amid ongoing global economic uncertainties.
- Prior to this rule change by the Securities and Exchange Board of India (SEBI), actively managed equity funds could invest a residual portion of their portfolio in non-equity instruments like debt and REITs, but gold and silver were not explicitly included. - The new regulations are part of a broader overhaul of mutual fund classifications by SEBI, which includes the introduction of "Life Cycle Funds" and the discontinuation of "solution-oriented schemes". - This decision comes at a time when Indian investors have shown increased interest in precious metals; in January 2026, inflows into gold ETFs surpassed those into equity funds for the first time. - The total assets under management (AUM) for the Indian mutual fund industry stood at ₹81.01 lakh crore (approximately $972 billion) as of January 31, 2026, with equity-oriented schemes accounting for ₹58.02 lakh crore. - Silver ETFs in India have seen significant returns, with some funds delivering over 25% in the first 20 days of 2026. - Gold ETFs also performed strongly in 2025, with some funds providing returns of up to 72% for the year. - The new framework also stipulates that from April 1, 2026, the valuation of physical gold and silver held by mutual funds must be based on the polled spot prices on domestic stock exchanges, moving away from the London Bullion Market Association prices. - The current chairman of SEBI, the regulatory body that implemented these changes, is Tuhin Kanta Pandey.
