SEBI has allowed mutual fund units to invest in gold-based exchange traded commodity derivatives (ETCDs).
In order to increase the participation of mutual funds in the commodity market, the regulator has allowed them to invest in ETCD with some curb. Apart from 'gold' through ETF, mutual fund schemes can not invest in physical goods (physical goods).
Investment limit
Mutual funds will not be able to invest in one gold ETDC of more than 10% of the NAV of a scheme. In case of Multi Asset Allocation, the risk plan for ETCD will not exceed 30% of the NAV.
The regulator also said that in addition to multi asset allocation plans, hybrid schemes other than ET would not exceed 10% of the NAV.
In a circular the regulator said that any mutual fund scheme can not invest in any other item except gold investment through Gold Exchange Traded Funds (ETFs). In this case, ETDD based on gold will also be considered as gold based product for gold ETF. Mutual funds can invest in hybrid schemes and gold ETFs in ETCDs.
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In order to increase the participation of mutual funds in the commodity market, the regulator has allowed them to invest in ETCD with some curb. Apart from 'gold' through ETF, mutual fund schemes can not invest in physical goods (physical goods).
Investment limit
Mutual funds will not be able to invest in one gold ETDC of more than 10% of the NAV of a scheme. In case of Multi Asset Allocation, the risk plan for ETCD will not exceed 30% of the NAV.
The regulator also said that in addition to multi asset allocation plans, hybrid schemes other than ET would not exceed 10% of the NAV.
In a circular the regulator said that any mutual fund scheme can not invest in any other item except gold investment through Gold Exchange Traded Funds (ETFs). In this case, ETDD based on gold will also be considered as gold based product for gold ETF. Mutual funds can invest in hybrid schemes and gold ETFs in ETCDs.
For more regular updates click here
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