Mutual Funds Suspend Fresh Investments in Gold ETF FoFs From 16 October

Key Takeaways

• Several Indian asset management companies suspended fresh subscriptions in their gold ETF fund-of-funds schemes from 16 October 2026.
• The restrictions generally cover new lump-sum investments, new SIP and STP registrations, and switch-ins, while existing registered transactions remain operational.
• Gold exchange-traded funds continue to trade on stock exchanges, and the suspension of subscriptions in gold FoFs does not amount to a closure of existing investments.

Gold ETF FoFs Stop Accepting Fresh Subscriptions

Several mutual fund houses temporarily stopped accepting new subscriptions in their gold exchange-traded fund fund-of-funds (FoFs) with effect from 16 October 2026.

The restrictions were announced through scheme-specific notices and addendums issued by asset management companies.

Fund houses identified in industry reporting include ICICI Prudential Mutual Fund, Kotak Mutual Fund, Axis Mutual Fund, Tata Mutual Fund, DSP Mutual Fund and Aditya Birla Sun Life Mutual Fund.

The announcements followed a period of strong interest in gold-linked investment products.

Media reports attributed the coordinated restrictions to regulatory guidance. However, a corresponding public SEBI circular setting out a uniform industry-wide suspension was not independently established.

The individual AMC notices therefore remain important for identifying the precise restrictions applicable to each scheme.

Which Transactions Are Affected?

The restrictions generally apply to fresh money entering the affected fund-of-funds schemes.

They include new lump-sum purchases, fresh SIP registrations, new systematic transfer plans and switch-in transactions.

DSP Mutual Fund's announcement, for example, specifies a temporary suspension of fresh lump-sum investments, SIP and STP subscriptions, and switch-ins in DSP Gold ETF FoF.

The restrictions took effect on 16 October.

Existing SIP and STP arrangements registered before the effective date continue to be processed under the published terms.

Redemption transactions also remain permitted.

This distinction means existing unitholders are not required to redeem their investments because fresh subscriptions have been suspended.

Gold ETFs Continue Trading on Exchanges

Gold ETF FoFs and gold ETFs provide different routes for obtaining exposure to gold-linked investments.

A gold ETF is listed on a stock exchange and can be bought or sold through the exchange mechanism, subject to market availability and trading conditions.

A gold ETF FoF is a mutual fund scheme that primarily invests in units of an underlying gold ETF.

Investors generally access the FoF through the conventional mutual fund subscription and redemption process.

The reported restrictions affect fresh subscriptions to specified gold ETF FoF schemes. They do not constitute a general suspension of stock-exchange trading in gold ETFs.

The exchange-traded products remain subject to their own liquidity, market-price and tracking characteristics.

Why Scheme-Level Notices Matter

The operational restrictions are temporary, but reopening dates have not been established uniformly across all affected schemes.

Some fund houses may issue subsequent addendums specifying when subscriptions resume or whether the restrictions are modified.

The treatment of previously registered transactions and the exact scope of suspended facilities may also differ.

A suspension of fresh subscriptions should not be confused with a scheme merger, liquidation or closure.

Existing units continue to represent investments in the relevant fund-of-funds portfolio, and their value remains linked to the underlying holdings and applicable expenses.

The latest announcements demonstrate how access to a mutual fund investment route can change without an equivalent change in the trading status of the underlying exchange-traded instrument.