Fund houses resume large-ticket gold ETF subscriptions as concerns ease

Tata MF, HDFC MF, Aditya Birla Sun Life MF and Axis MF have removed restrictions on direct gold ETF investments as supply and macroeconomic concerns ease

Fund houses have started lifting curbs on large-ticket direct investments in gold exchange-traded funds (ETFs), which were placed in June amid concerns over rising gold imports and supply constraints.

 

Tata Mutual Fund (MF), on Friday, resumed direct subscriptions of ~25 crore and above in Tata Gold ETF and removed the ~10 lakh monthly cap on lump-sum investments and switch-ins into its Gold ETF Fund of Fund. HDFC MF, Aditya Birla Sun Life MF, and Axis MF have also done away with the restrictions. Invesco Mutual Fund will lift its restrictions from August 24.

 

The curbs were only on fresh ETF unit creation through direct investment. Investors could continue to invest any amount through exchanges. 

 

Several fund houses, including Nippon India and ICICI Prudential, introduced such restrictions in June as surging import bills amid rising oil prices led to macroeconomic concerns. According to MF executives, gold supply constraints were also a reason.

 

“As responsible institutions, we decided to place curbs as gold inflows were adding to some of the pressure on the current account and the rupee. At the same time, there were supply constraints in the market. Both these factors have eased now, and flows have also tapered, allowing us to resume subscriptions," said the chief executive officer of one of the fund houses that has resumed direct investments.

 

The resumption of direct investments comes amid a sharp rally in gold, with bullion prices surging nearly 12 per cent over the past month. The rally has been supported by a weaker dollar and renewed concerns over US fiscal sustainability after the Treasury unexpectedly ramped up buybacks of long-dated government debt.

 

Gold ETFs, which were among the highest grossing MF categories until January 2026, have seen a decline in investor interest amid cooling prices. In July, they attracted net inflows of ~1,560 crore.