HDFC Gold ETF's fundamental attributes changed. Here's everything investors should know

The AMC has revised the provisions related to asset allocation in the Scheme Information Document (SID) and Key Information Memorandum (KIM) of the scheme. It has also added a section on risk factors associated with investments in exchange-traded commodity derivatives to both documents.

Asset allocation

As of now, HDFC Gold ETF invests 95% in Gold, including physical gold and other gold-related instruments permitted by SEBI from time to time. It also invests up to 5% in debt securities and money market instruments.

The scheme's 5% debt allocation can include units of debt mutual funds along with other debt securities and money market instruments.

The 95% gold allocation would include "Gold and other Gold related instruments which may be permitted by SEBI from time to time as per Clause 3.2 of the Master Circular dated June 27, 2024."

Further, investment in Gold Deposit Scheme (GDS), Gold Monetisation Scheme (GMS) and Exchange Traded Commodity Derivatives (ETCDs) having gold as the underlying by the Scheme will be subject to the following:

• The cumulative exposure to gold related instruments i.e. GDS of banks, GMS and ETCD having gold as the underlying shall not exceed 50% of net asset value of the scheme.

• Within the 50% limit, the investment limit for GDS of banks and GMS as part of gold related instrument shall not exceed 20% of net asset value of the scheme.

• The unutilized portion of the limit for GDS of banks and GMS can be utilized for ETCD having gold as the underlying.

The AMC has also clarified that residual cash for ETCD exposure shall not considered as part of limit of 0% to 5% allocated towards debt securities.

"It may be noted that the margin placed for taking exposure to ETCDs are generally lower than the ETCD exposure limit considered for the purposes of monitoring investment limits and therefore, the residual cash (i.e. ETCD exposure less placement of margin towards participation in ETCDs) are placed in cash and cash equivalents in the interest of investors. The said placement in cash and cash equivalents shall not be considered as part of the limit of 0% to 5% allocated towards Debt Securities & Money Market Instruments, units of Debt Schemes of Mutual Funds," the AMC said in a notice-cum-addendum dated March 15, 2026.

All other attributes of the scheme remain unchanged.

Options for investors

As the scheme's fundamental attributes have changed, investors may opt to exit if they do not consent to the changes. However, this is purely optional and not mandatory.

"It may be noted that the offer to exit is purely optional and not compulsory. If the Unit holder has no objection to the proposed change, no action is required to be taken and it would be deemed that such Unit holder has consented to the proposed change," the AMC said.

The AMC has announced a 30-day exit option period starting from March 23 to April 21, 2026. During this period, no exit load will be charged.

Unitholders can take the following steps if they do not consent to the changes in fundamental attributes of the scheme:

• Redeem units by selling them on stock exchanges

• Redeem units amounting to ₹25 crore and above directly with the AMC/Fund at Intra-day NAV. However, this limit shall not apply to Market Makers.

Further, unit holders who have pledged/encumbered their units will not have the option to exit unless they submit a letter of release of their pledges/ encumbrances prior to submitting their redemption requests.

Yes. The redemption of units from the scheme may entail capital gain/loss in the hands of the unitholder. Therefore, you should consult your tax advisor before redeeming, especially if large amounts are involved.

"For unit holders who redeem their investments during the Exit Option Period, the tax consequences as set forth in the SID of the Scheme and SAI of the fund would be applicable. In case of NRI investors, TDS shall be deducted from the redemption proceeds in accordance with the prevailing income tax laws. In view of the individual nature of tax consequences, Unitholders are advised to consult their professional tax advisors for tax advice," the AMC said.