HDFC Asset Management Company has implemented temporary restrictions on lump-sum subscriptions in its gold exchange traded funds effective from June 5, 2026. According to reports from Reuters, the mutual fund house announced these restrictions through an addendum issued on Thursday, citing broader economic and market conditions as the reason for the decision. The restrictions come as investors continue to rely on gold as a safe-haven asset amid geopolitical turmoil and economic uncertainty. As per HDFC Mutual Fund, the operational restriction takes effect immediately and applies to both the HDFC Gold ETF and the HDFC Gold Fund of Fund schemes.
The restrictions specifically target large investors making substantial investments in gold products. As reported by Reuters, HDFC Mutual Fund will suspend direct subscriptions of ₹25 crore and above from large investors in the HDFC Gold ETF from June 8, 2026. Additionally, the fund house has capped new investments in the HDFC Gold ETF Fund of Funds at ₹10 lakh per PAN per calendar month from 3 p.m. IST on June 5, 2026. This limit applies to both lump-sum investments and transfers from other schemes. However, the fund house has protected routine retail investors by ensuring that Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs) registered before the cutoff date will continue to process normally.
The latest restrictions coincide with India's gold ETFs recording their first net monthly outflow in a year during May 2026. According to The Hindu BusinessLine and Business Standard, gold ETFs registered net outflows of $61 million, equivalent to 0.4 metric tonnes, reducing total holdings to 116.3 tonnes. This outflow follows the government's decision to raise import duties on gold and silver to 15% from 6% on May 13, 2026, as part of efforts to curb overseas purchases and ease foreign exchange reserve pressure. Following the duty hike announcement, domestic gold prices surged to ₹164,497 ($1,717) per 10 grams, their highest level in more than two months. Despite May's outflow, gold ETFs have attracted net inflows of $3.48 billion so far this year, indicating continued investor interest despite recent profit-booking activities.
The latest restrictions come as both HDFC Gold ETF and its Fund of Funds show mixed performance metrics. According to ET Alpha, the HDFC Gold ETF launched on December 28, 2022, had an AUM of ₹69.72 crore as of April 30, 2026. In the last one year, the fund lost 4.01% and since its inception it has given a CAGR of 8.27%. The HDFC Gold ETF FoF, launched on November 1, 2011, had an AUM of ₹11,464 crore as of April 30, 2026. In the last one year, it gave a return of 57.05% and since its inception it has given a return of 11%. The fund house has ensured that all other terms and conditions of the schemes will remain unchanged as per the latest addendum, which shall form an integral part of the SID/KIM of the schemes as amended from time to time.
