Gold ETF rules 2026: What SEBI allows and what has exactly changed in HDFC Gold ETF?

Effective from April 22, 2026, the scheme will allow the fund manager to take limited exposure to SEBI-approved gold-backed exchange-traded commodity derivatives, in addition to physical gold, if required.

What the SEBI rules say

The master circular will be effective from April 1, 2026. It has designated the Gold Deposit Scheme (GDS) of banks, Gold Monetization Scheme, 2015 (GMS), and Exchange Traded Commodity Derivatives (ETCDs) having gold as the underlying gold-related instruments.

The circular says that the existing investments by Gold ETFs under the GDS should continue till maturity unless withdrawn prematurely.

The master circular allows standard physical gold bars of fineness 995 parts per thousand (or 99.5% purity) that conform to the London Bullion Market Association (LBMA) Good Delivery Standards.

The valuation of gold is required to be done as per the guidelines set by the Association of Mutual Funds in India (AMFI).

"The mutual funds shall value physical Gold and Silver by using the polled spot prices published by the recognized stock exchanges which are used for settlement of physically delivered Gold and Silver derivatives contracts. The spot polling mechanism shall comply with the spot polling guidelines as specified by the Board from time to time. In this regard, AMFI in consultation with the Board has prescribed a uniform policy," the master circular says.

What has changed in HDFC Gold ETF?

As per the HDFC Mutual Fund's notice-cum-addendum dated March 15, 2026, HDFC Gold ETF is required to allocate at least 95% of assets in gold and gold-related instruments, including GDS, GMS, and Gold-backed ETCDs.

However, the AMC has stated that exposure to gold-related instruments should not exceed 50% of the scheme's net asset value. Within this 50% limit, the investments in GDS and GMS shall not exceed 20% of the net asset value of the scheme. Further, the unutilised portion of the limit for GDS and GMS can be used for investing in gold-backed ETCD.

Does this mean HDFC Gold ETF will now invest only 50% in physical gold?

No.

Some posts circulating on social media claim that HDFC Gold ETF will now invest only 50% of its assets in physical gold, and the remaining could be invested in gold derivatives.

Such claims are, however, misleading.

The HDFC AMC has clarified that the option of investing in gold-backed ETCDs is only a back-up option for exceptional circumstances. The scheme will continue to remain primarily focused on physical gold.

The AMC says allowing HDFC Gold ETF to invest in ETCDs is only an enabling provision, as per existing SEBI regulations. "This does not change how the Scheme normally operates."

The scheme will consider exposure to ETCDs only in "rare situations." It won't be a part of the scheme's regular strategy.

"Investment in ETCDs will be considered only in rare situations, such as when there is a temporary shortage of physical gold in the market. The Scheme does not intend to use ETCDs as part of its regular strategy," the AMC said in response to a social media post.

The AMC said that as of February 2026, the scheme's asset allocation was as follows:

• 98.65% in physical gold

• 1.35% in cash, cash equivalents and net current assets

"The core approach of the Scheme remains the same; Invest in physical gold to the maximum extent possible & keep the remaining portion in cash and net current assets." HDFC AMC said.