India's Sebi allows equity mutual funds to increase gold and silver allocation to 35%
Change
India's Sebi allowed actively managed equity mutual fund schemes, after meeting their core equity allocations, to invest their residual portion — up to 35% of assets — in gold and silver instruments and units of infrastructure investment trusts, and permitted hybrid schemes to buy gold and silver ETFs.
Why it matters
The regulator's overhaul imposes tighter classification and portfolio‑overlap limits that restrict asset managers from running multiple similar strategies to expand exposures; overlap between certain fund pairs is capped at 50% and monthly overlap disclosures are required. It also discontinues solution‑oriented schemes immediately and introduces capped life‑cycle (target‑date) funds with limits on numbers and permitted allocations.
Implications
- • Asset management companies must stop accepting new subscriptions to solution‑oriented mutual fund plans immediately and initiate mergers of existing plans into comparable schemes subject to regulatory approval.
- • Asset management companies must publish monthly category‑wise portfolio overlap disclosures on their websites.
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Source
Topics
Policy & Regulation Regulatory Actions Capital Markets Financial Services