New Delhi: India’s market regulator has allowed the country’s $385 billion actively managed equity funds to park more of their money in gold and silver, giving them greater flexibility at a time when global demand for hard assets is rising.
Under revised rules by the Securities and Exchange Board of India, stock funds can invest the remainder of their portfolios — up to 35% of their assets — in gold and silver instruments, as well as in units of infrastructure investment trusts.
By widening the list of permitted assets, the regulator has given equity funds a broader toolkit that already includes money market and other liquid securities. The change could also create a new source of demand for gold and silver, which have attracted robust investor interest amid a blistering rally.
In January, local investors put more money into gold exchange-traded funds than into stock funds, a rare reversal that underscores the growing appeal of bullion amid market uncertainty.
SEBI also approved the creation of a new category of life cycle funds or target-date funds. These plans will have pre-determined maturities from five to 30 years and are designed for goal-based investing, such as retirement planning.
Asset management firms will be allowed to offer up to six active life cycle funds at a time, potentially positioning the industry to compete with the government’s National Pension System that oversees about $177 billion.
This report is auto-generated from Bloomberg news service. ThePrint holds no responsibility for its content.
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