If you have invested in the Union Multi-Asset Allocation Fund, this update is important for you.
The mutual fund house has announced changes to some key features of the scheme, mainly related to asset allocation—that is, where and how much the fund invests. These changes have been made in line with SEBI regulations.
What Has Changed in the Investment Rules?
The Union Multi-Asset Allocation Fund invests in equities, debt, gold, and silver. Earlier, the scheme had separate limits for these commodities:
Gold ETFs: Minimum 10% and maximum 25% of total assets
Silver ETFs: Maximum 10% of total assets
Under the new rules, these individual limits have been removed. Instead, a single combined limit will apply to:
Gold ETFs
Silver ETFs
Commodity ETFs
ETCDs (Exchange Traded Commodity Derivatives)
Any other commodity investment options permitted by SEBI in the future
This means the fund will now invest in commodities within one overall limit, rather than following separate limits for gold and silver.
Why Did the Fund House Make This Change?
According to the fund house, the new structure will make the scheme easier to manage and help it respond better to market trends.
Different commodities go through cycles of rise and fall. With a combined limit, fund managers can adjust investments more efficiently to benefit from these cycles.
This flexibility is expected to help in better portfolio balance and potentially improve returns.
When Will the New Rule Be Implemented?
This change is considered a fundamental change in the scheme’s characteristics.
The new investment rule will come into effect from January 20, 2026. From this date, fund managers will start adjusting the portfolio according to the new asset allocation strategy.
Exit Option Available for Investors
Since this is a major change, investors are being given an exit option. If you do not agree with the new structure, you can:
Redeem your investment, or
Switch to another Union Mutual Fund scheme
The exit window is open from December 19, 2025, to January 19, 2026. During this period, no exit load will be charged.
Possible Benefits of the New Rules
Better use of market trends: A combined commodity limit allows fund managers to take advantage of ups and downs in gold, silver, and other commodities, which may help improve returns.
Greater investment flexibility: Fund managers are no longer restricted by separate minimum or maximum limits for gold and silver, allowing quicker adjustments based on market conditions.
Free exit option: Investors who are uncomfortable with the change can exit or switch without paying any exit load until January 19, 2026.
Potential Risks and Concerns
Uncertainty in asset allocation: With no fixed minimum investment in gold or silver, investors may find it difficult to know how much of these traditionally safer assets are included in the portfolio.
Change in scheme identity: This is a change in the fundamental nature of the scheme. Investors who chose the fund earlier because of its guaranteed minimum exposure to gold (at least 10%) may now feel that it has become a different product.
