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SEBI Proposal: Equity Funds May Hold Gold and Silver

23 July 20251 min read
BANKING & FINANCESEBI Proposal:Equity Funds MayHold Gold andSilver23 July 2025safalsetu.com

Why in the news

SEBI is considering allowing equity-oriented mutual fund schemes to hold gold and silver as part of a revamped scheme categorisation.

Key facts

  • Present rule: equity funds put 65-80% of their corpus in equities.
  • Proposal: optional allocation to gold and silver, at the manager’s discretion based on strategy and outlook.
  • Impact: managers gain room to hedge or lift returns; investors get diversified exposure in one fund, which may appeal during volatility or inflation.

Background

  • Part of a broader revamp of fund categorisation, balancing flexibility with investor protection.
  • If approved, scheme information documents (SIDs) and investment mandates would need revision.

Exam angle

  • Regulator: SEBI; instrument: equity mutual funds; document to be revised: SID.

Test yourself

1. Which regulator proposed letting equity mutual funds invest in gold and silver?

SEBI's proposed categorisation framework includes this flexibility.

2. What share of corpus must equity mutual funds currently invest in equities, per the notes?

Equity funds are required to hold 65-80% in equities.

3. Under the SEBI proposal, the exposure of equity funds to gold and silver would be what?

The allocation would be optional, decided by the fund manager.

This topic is part of Daily Current Affairs 23 July 2025 (15 topics).

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