Whalesbook
SEBI Allows Gold and Silver in Equity Funds
Bandhan Mutual Fund is among the first asset managers to act on the Securities and Exchange Board of India's (SEBI) recent rule change. This change allows equity-oriented schemes to invest in gold and silver exchange-traded funds (ETFs). Bandhan MF has updated the investment plans for three of its schemes – a small-cap fund, a flexi-cap fund, and an aggressive hybrid fund – permitting up to 10% exposure in these precious metal ETFs.
Why Gold and Silver? Managing Risk and Finding Opportunities
Sirshendu Basu, head of products at Bandhan MF, explained the strategy. 'The goal is to improve risk-adjusted returns,' he said. 'It also gives fund managers flexibility to capture opportunities in commodities that may not have a direct listed equity option, allowing us to gain at least the market return from gold and silver.' This investment will be opportunistic, deployed when fund managers spot market advantages rather than as a permanent part of the portfolio.
Other Fund Mandate Updates
Bandhan MF has also been updating asset allocation plans for other equity funds. Many schemes now include 'covered calls,' a strategy to generate extra income from option premiums on current stock holdings. Additionally, several funds have added infrastructure investment trusts (InvITs) to their mix, further diversifying portfolios and increasing income potential.