Sebi’s gold fund curbs may have limited impact as ETF route remains open

What happened: Sebi has told mutual funds to stop accepting fresh lump-sum investments, SIPs and STPs into gold ETF fund-of-funds from 16 October. Gold ETFs are not covered by the curbs. Key numbers: Gold ETF FoFs are about 34% of industry gold assets, gold ETFs about 66%, per Value Research. Why it matters: Experts say the gap could blunt the curbs, since investors can still buy gold ETFs directly on exchanges, redirecting volume from FoFs to ETFs. One official said the rationale is unclear as September-quarter imports declined.

Sebi has told mutual funds to stop accepting fresh lump-sum investments, SIPs and STPs into gold ETF fund-of-funds from 16 October. Gold ETFs are not covered by the curbs.

Experts say the gap could blunt the curbs, since investors can still buy gold ETFs directly on exchanges, redirecting volume from FoFs to ETFs. One official said the rationale is unclear as September-quarter imports declined.