17 Fund Houses Shut Gold FoFs: What Your SIP Can Still Do

If you tried to start a new gold SIP this week and the app said no, you were not alone. Around 17 mutual fund houses have stopped fresh money into their gold ETF fund of funds from October 15 and 16.

These are big names: HDFC, Kotak, ICICI Prudential, Tata, DSP and SBI among them. And the money they hold is not small either. The gold FoF industry stood at ₹47,359 crore as of August, according to DSP MF data quoted by Mint.

Quick answer

• New lump sums, switch-ins and new SIP or STP registrations in the affected gold FoFs are paused until further notice.
• SIPs you registered before the cut-off keep running at the applicable NAV, and you can still redeem, switch out or run an SWP.
• Step-ups and top-ups on existing SIPs are blocked at several fund houses, including Zerodha, DSP and Tata.
• You can still buy gold ETFs directly on the NSE and BSE through a demat account, but check the iNAV before you buy.

What exactly has been stopped

A gold FoF is a mutual fund that does not hold gold itself. It is a feeder that puts your money into a gold ETF. Many people like it because it works without a demat account and lets you run a small monthly SIP.

That entry door is what has been shut. Distributor platform Creso said fund houses began sending out notices on the evening of October 15, closing the door to new money in their gold funds.

Each fund house wrote its own notice. Tata said fresh and additional lump sums, switch-ins, top-ups and new SIP and STP registrations in Tata Gold ETF FoF are restricted from October 16. DSP said the same for DSP Gold ETF Fund of Fund, and also blocked modifying an existing SIP with a top-up.

Zerodha Mutual Fund put it in plain words. It said fresh lump sums will not be accepted, fresh SIPs will not be accepted, and the step-up facility in existing SIPs will not be available.

Schemes named in the reports include Kotak Gold Fund, Kotak Gold Silver Passive FoF, Tata Gold ETF Fund of Fund and ICICI Prudential Gold ETF FoF. New Indian Express reported that some gold-silver FoFs are covered too.

How big the gold FoF route has become

The pause matters because a lot of money has been coming in through this pipe. The chart below shows the industry size of gold FoFs over the past year, using DSP MF data reported by Mint.

Bar chart: gold FoF industry size was ₹22,837 crore in September 2025, ₹53,638 crore in March 2026 and ₹47,359 crore in August 2026

Source: Mint, citing DSP Mutual Fund data

Gold ETFs themselves have seen even bigger flows. Net inflows into gold ETFs rose from ₹9,225 crore in 2024 to ₹42,961 crore in 2025, according to industry data cited by New Indian Express.

This year has been stronger still. Gold ETFs pulled in ₹45,926 crore between January and September 2026, with January alone bringing ₹24,040 crore. In September, AMFI data showed net inflows of ₹4,450.61 crore, up 71.4% from ₹2,596.70 crore in August, as reported by ET.

Why the door was shut now

No fund house has spelt out the reason in its notice. Creso also said SEBI has not issued any public circular on this.

But the pieces fit together. Shriram Mutual Fund told investors the restrictions were in line with SEBI instructions conveyed through AMFI. New Indian Express, quoting industry and AMFI sources, said the move followed regulatory advice ahead of an expected jump in festive and wedding demand.

The worry is the rupee. India meets more than 95% of its gold and silver needs through imports, so a buying spree widens the trade deficit. Gold imports were $1.8 billion in September, down from $2.3 billion in August, but October and November usually bring a festive rush.

Foreign investors have also pulled ₹3.08 lakh crore out of Indian equities so far this financial year, NSDL data show. Add high crude oil prices, and there is pressure on the rupee from several sides.

"If you can't control crude oil imports, at least gold and silver imports could be curtailed," Navneet Damani of Motilal Oswal Financial Services told Mint. Pankaj Mathpal of Optima Money Managers put it more simply: the government wants to curb demand in the festival and wedding season to steady the rupee.

Is your money stuck?

No. This is not a freeze on what you already own. HDFC, Tata, Invesco and Zerodha have said in so many words that redemptions, switch-outs and SWPs continue.

Experts also stressed that this is not a liquidity scare like the ones seen in small-cap funds. Gold ETFs trade every day on the NSE and BSE, and gold itself stayed fully liquid.

It has happened before, too. In October 2025, several fund houses paused lump sums in silver ETF FoFs and reopened within about two weeks. Similar curbs on gold FoFs were imposed in June this year.

What to do now

1. Open your fund house's notice-cum-addendum and read what it says about your scheme, instead of assuming everything has stopped.
2. Let your existing SIP run if it still fits your plan. Just do not expect a step-up or top-up to go through right now.
3. If you need new gold exposure, a gold ETF bought through a demat account is still open. Compare the market price with the iNAV first, because strong demand can push the price above the value of the gold it holds.
4. Secondary-market sovereign gold bonds are another route, but Mint notes that buyers there no longer get tax-free maturity gains and face 12.5% long-term capital gains tax, the same as gold ETFs.
5. If your portfolio already has enough gold, you do not need to do anything.

Mistakes to avoid

The biggest one is panic buying. "It should not be FOMO because the government is stopping fresh investments into FoFs," Mathpal told Mint.

The second is paying a premium without noticing it. If an ETF's market price is well above its iNAV and that premium narrows later, you lose money even if gold prices stay flat.

The third is selling your FoF units just because new money is blocked. Your existing units are not affected, and nothing in the notices forces you out.

FAQs

Will my existing gold FoF SIP stop? No. SIP and STP instalments registered before the effective date continue to be processed at the applicable NAV, as Kotak, Tata and ICICI Prudential have said.

Can I redeem my gold FoF units? Yes. Redemptions, switch-outs, STP-outs and SWPs continue during the suspension.

Are gold ETFs also closed? No. The curbs cover specified gold FoFs, not gold ETF units traded on the NSE and BSE. You need a demat account to buy them.

Are silver funds and multi-asset funds affected? ET reports that pure silver funds and multi-asset funds have not been covered so far, but some gold-silver FoFs are. Check the latest notice before you invest.

How long will the pause last? The notices say until further notice. No end date has been given.

This article is for education only and is not investment, tax or legal advice.

Sources

• Mint: Why have fresh investments into gold FoFs been halted, and what should you do?
• The Economic Times: HDFC, Kotak, ICICI Prudential among 17 mutual fund houses to temporarily restrict subscriptions in gold ETF FoFs
• The Economic Times: Mutual funds bar fresh investments in Gold ETF FoFs. What are the rules for existing SIP investors?
• The New Indian Express: Mutual funds suspend fresh investments in gold, silver FoFs ahead of festive season