HDFC Mutual Fund Imposes Temporary Limitations on Large Inflows into Gold ETF and Gold ETF FoF

HDFC Mutual Fund Restricts Lump-Sum Subscriptions in Gold ETF and FoF

HDFC Mutual Fund has temporarily restricted lump-sum subscriptions in its Gold ETF and Gold ETF Fund of Fund (FoF) due to prevailing economic and market conditions. The fund house announced on Thursday that the restrictions on lump-sum subscriptions in HDFC Gold ETF and HDFC Gold ETF Fund of Fund will remain in force until further notice.

The restrictions are a result of the Centre's recent decision to increase the effective tax on imports of gold and silver to 18.4 percent from 9.2 percent, effective from May 13, 2026. This move has led to a significant impact on the gold market, with spot gold prices climbing to Rs 1.60 lakh per 10 grams in the national capital on Thursday, a rise of Rs 700 from the previous day.

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In a statement, HDFC Mutual Fund said that it has decided to temporarily restrict lump-sum subscriptions in HDFC Gold ETF and HDFC Gold ETF Fund of Fund until further notice. For HDFC Gold ETF, subscription transactions by large investors directly with the fund house will not be accepted from June 8, 2026, with a minimum investment requirement of Rs 25 crore. For HDFC Gold ETF Fund of Fund, lump-sum purchases and switch-in transactions will be processed only up to Rs 10 lakh per PAN per calendar month at the first-holder level.

The limit for the fund of fund scheme will apply to transactions received after the cut-off time of 3 pm on June 5, 2026. All other terms and conditions of the schemes will remain unchanged. The move is intended to manage the fund's investments in line with the changing market conditions.