Indian mutual funds limit inflows into key gold ETF products

Several major Indian asset management companies have announced restrictions on investor subscriptions to gold exchange-traded funds and related fund of fund products. At least six companies, including Tata Mutual Fund, ICICI Prudential Asset Management, HDFC Mutual Fund, Aditya Birla Sun Life Asset Management, and DSP, filed separately on Thursday evening to disclose the above restrictive measures. Although these asset management companies did not explain the reasons for the decision, the market widely believes that the move comes against the backdrop of a weakening Indian rupee and persistently strong investor demand for allocating to precious metals through ETFs. According to a statement, Tata Mutual Fund has imposed temporary restrictions on large subscriptions to its fund of fund products under its gold ETF starting from October 16; the company said: "This suspension is temporary in nature and will only last until further notice."