SEBI just dropped a game-changer for mutual fund investors. Active equity schemes can now dip into gold and silver investments, a first that could reshape how fund managers build portfolios. The announcement came Thursday, sparking buzz in Mumbai’s financial circles as part of broader category overhauls.
Equity funds have long been boxed in by allocation rules—like 80% minimum in large-caps for those schemes— with leftovers going to non-equity avenues. Now, fund managers gain leeway to include gold and silver ETFs, money market tools, and InvITs in that flexible slice, subject to limits. This isn’t just tinkering; it’s about blending commodity stability with stock market growth.
SEBI’s retirement and kids’ solution schemes are history, making way for Lifecycle Funds. Picture this: a fund with a fixed 5-30 year horizon that auto-shifts from aggressive equities to conservative debt over time. High early exit fees (up to 3%) nudge discipline, but liquidity stays intact.
These new funds span asset classes—stocks, bonds, REITs, InvITs, commodity derivatives, gold/silver ETFs—ideal for milestone planning. Fund houses also get an extra scheme slot (12 total for active equity/hybrids), allowing value and contra strategies if overlaps stay under 50%.
For thematic/sectoral funds, houses must ensure 50% portfolio distinction from peers (bar large-caps). As mutual fund assets swell past trillions, SEBI’s tweaks promise more choices, reduced redundancy, and smarter risk management. Investors, take note: your equity funds just got a shiny upgrade.