ICICI Prudential Mutual Fund has placed restrictions on large investments in its Gold Exchange Traded Fund (ETF), becoming the second major asset management company after HDFC Mutual Fund to curb bulk inflows into the category. The move reflects growing caution among fund houses amid rising investor demand for gold-linked investment products.

According to sources, ICICI Prudential Mutual Fund will not accept investments of Rs 25 crore or more in its Gold ETF starting June 5 after 3 p.m. The decision comes just days after HDFC Mutual Fund announced similar restrictions on fresh inflows into its Gold ETFs, which are set to take effect from June 8.

The measures have been introduced in response to a sharp surge in investor interest in gold-backed instruments, which has led to significant inflows into ETFs tracking the precious metal. Industry participants say the rapid pace of inflows, combined with elevated global gold prices, has prompted fund houses to reassess liquidity management strategies in the segment.

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Market sources indicate that other leading asset management companies may follow suit. Among them, Nippon India Mutual Fund—one of the largest players in the gold ETF space by assets under management—is reportedly evaluating whether to impose similar restrictions on bulk investments. The broader industry includes major firms such as SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund and Nippon India Mutual Fund, all of which hold significant exposure to gold ETF assets.

Earlier, HDFC Mutual Fund had also introduced temporary restrictions on large investments in its gold ETF offerings, citing prevailing market conditions and the need to manage inflow volatility. With two major fund houses already implementing such measures, analysts expect others to closely monitor demand trends before taking further action.

The development underscores increasing caution within the mutual fund industry as gold continues to attract strong investor interest amid global economic uncertainty. Fund managers are balancing the need to accommodate demand with the operational challenges of managing large and fast-moving inflows into physically backed ETF structures.

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