Does 35% gold, silver and InvIT allocation flexibility make equity mutual funds a better buy? Experts explain
AI Summary
The SEBI's revised mutual fund framework allows equity-oriented schemes to diversify into assets like gold ETFs and InvITs, which could enhance risk management and provide retail investors with a more resilient investment vehicle. However, investors should be cautious and not assume that all funds will fully utilize this flexibility; careful scrutiny of fund strategies and performance is essential to ensure alignment with individual risk profiles. This shift may also lead to a divergence in returns compared to traditional equity benchmarks, particularly in bullish markets, making it crucial for investors to stay informed about their fund's actual asset allocation.
In early 2026, the Securities and Exchange Board of India (SEBI) introduced a significant change in the mutual fund framework, giving equity-oriented schemes greater flexibility to invest part of their non-core allocation in assets beyond equities.
Under the revised framework, eligible equity mutual funds can use their residual portfolio allocation for assets such as gold ETFs, silver ETFs and Infrastructure Investment Trusts (InvITs). The flexibility is subject to the minimum equity exposure prescribed for each mutual fund category.
Original Article
Published on Livemint
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This is a results news update from Livemint, published on 29 September 2026.
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