India relaxes regulations, allowing stock funds to allocate gold and silver, with a maximum holding ratio of 35%!

India's securities regulator expands the investment scope of actively managed equity funds, allowing them to hold gold and silver assets.

On February 26, according to Bloomberg, the Securities and Exchange Board of India (SEBI) revised its rules to allow actively managed equity funds to allocate up to 35% of their assets to gold and silver-related instruments and infrastructure investment trust shares, broadening the investment boundaries for the country's $384 billion fund market and creating a new source of institutional demand for precious metals.

This policy adjustment comes as global demand for precious metals continues to rise. Boosted by the recent strong performance of gold prices, investor interest in gold assets has significantly increased. In January of this year, the Indian domestic market saw a rare reversal, with inflows into gold ETFs surpassing those into equity funds for the first time, reflecting the growing appeal of gold as a safe-haven asset amid increasing market uncertainty.

In addition to relaxing investment limits for equity funds, SEBI has also approved the establishment of a new type of lifecycle fund, namely target date funds. These products have predetermined maturity periods ranging from 5 to 30 years, primarily aimed at retirement planning and other goal-oriented investment needs.

According to the new regulations, asset management companies can issue up to six actively managed lifecycle funds simultaneously. This move is expected to foster competition between the asset management industry and the government-led national pension system, which currently manages approximately $177 billion in assets