Changes to Mutual Funds in India (2026)

Introduction

These changes aim to make valuation more transparent and give fund managers more flexibility to include precious metals as part of diversification.

The changes are duly outlined with some detailing

Valuation method for gold and silver
- From April 1, 2026, mutual funds that hold physical gold or silver (including gold and silver ETFs) must value those holdings using spot prices published by recognised Indian stock exchanges, rather than using international benchmarks like London Bullion Market Association (LBMA) prices
- This means the prices used in calculating fund NAVs will better reflect domestic market conditions and pricing
Equity and hybrid funds can include more gold and silver
- Under the revamped mutual fund rules, actively managed equity funds are now allowed to allocate a portion (for example, up to around 35%) of their portfolio to gold and silver instruments like ETFs or related assets, after meeting their core equity requirements
- Hybrid funds also get more flexibility to include these metals as part of diversification
New “life-cycle” funds include precious metals
- SEBI has introduced a new category called life cycle funds, which automatically adjust asset allocation over time based on an investor’s goal or timeline
- These funds may include a part of their holdings in gold and silver ETFs as part of their diversified strategy

Valuations of gold and silver holdings in mutual funds will be closer to Indian market prices, potentially reducing discrepancies across schemes
Equity and hybrid funds can now offer built-in commodities exposure without you having to invest separately in dedicated gold/silver schemes
The changes are part of SEBI’s broader effort to streamline mutual fund categories, improve transparency and give investors clearer choices