The decision by HDFC Mutual Fund to impose limits on large lump-sum investments into its Gold ETF and introduce a monthly cap on inflows into its Gold Fund of Fund has reignited discussions around investor behaviour, asset allocation, and India's growing obsession with gold.Speaking to ET Now, Feroze Azeez, Joint CEO, Anand Rathi Wealth said the move could be an attempt to protect investors from buying into an asset class after a sharp rally, a pattern that has been repeatedly witnessed across financial markets.Investors Tend to Buy After the RallyAccording to Azeez, investors often display a strong behavioural bias by gravitating toward assets only after they have already delivered substantial returns."Basically, investors behave in a very biased fashion. Whenever something runs up is when everybody starts talking about it. Before it runs up, there is nobody who is asking for it. When Bitcoin ran up, people bought it. When Nasdaq ran up, people bought it. Look at gold. Gold had a rally in dollar terms from $1,700-$1,800 and rallied all the way to $5,600 in January this year."He pointed out that investor inflows into gold ETFs surged dramatically near the peak."When gold prices were one-third of today's levels just two years back, there were inflows of only ₹30-40 crore into ETFs. But when the price in Indian rupees was almost ₹1,75,000 per 10 grams, we received ₹24,000 crore. People bought at peak prices and are now sitting on losses of nearly ₹2,000 crore."Azeez suggested that one motivation behind HDFC AMC's decision could be preventing investors from entering the asset class at elevated valuations.Why Gold Remains Expensive in IndiaWhile global gold prices have corrected sharply from their highs, domestic prices remain elevated due to currency depreciation and import-related factors."Today, gold prices in India are still high because of the rupee depreciation of around 8% this calendar year. Import duty has also created some arbitrage. Globally, gold is down nearly 20% from its peak despite an ongoing war."He further questioned the need for additional gold accumulation in India, given the country's already substantial holdings."We already have about four crore crore worth of gold in Indian households, while gold ETFs are about ₹1,75,000 crore. Why does India need more gold when nearly 28% of household savings are already in gold?"Gold's Unusual Behaviour During Geopolitical TensionsOne of the biggest surprises for investors this year has been gold's performance amid escalating geopolitical tensions in West Asia.Traditionally viewed as a safe-haven asset, gold has failed to deliver the kind of crisis-driven rally that investors have historically expected."This time around, gold has given a surprise and a shock to everyone. For decades, people believed that during bad times gold would support portfolios. This is the first time gold is behaving differently."Azeez noted that despite a major geopolitical conflict, gold prices have fallen significantly from their January highs."Gold is not behaving like gold. This is the first time in history there is a war of this nature and gold is down 20%. It has never happened that gold is not at a peak during the biggest crisis."He added that both equities and gold have often moved in the same direction since the conflict began, challenging conventional assumptions about portfolio diversification.Equities Offer Better Risk-Reward, Says AzeezWhile cautioning investors against chasing gold, Azeez expressed confidence in Indian equities for the current financial year.He highlighted historical market data suggesting that consecutive years of negative returns for the Nifty have been extremely rare."Your hopes are lowest when the probability of an asset doing well is the highest. Mathematically, equity is something I would definitely bet on today."Azeez pointed out that since 2001, there have been only a handful of instances when the Nifty delivered negative returns, and two consecutive negative financial years have never occurred."We have already had one negative financial year for the Nifty. If history repeats itself, the next one may not be negative. I would not be surprised if the Nifty delivered more than median returns and revisited the 26,000 level."Campaign Encourages Indians to Book Gold ProfitsAzeez also discussed his ongoing campaign encouraging Indians to sell a small portion of their gold holdings and book profits.He argued that reducing dependence on imported gold could help improve India's external balances."If all Indians sell just 1% to 1.5% of their gold holdings, we would not need gold imports. India's balance-of-payments gap can be significantly reduced if gold comes out of lockers and profits are booked."According to him, the initiative has already gained traction among investors."We have already seen about ₹100-125 crore worth of exits. One investor alone unwound ₹88 crore of gold ETFs and shared the receipt with us."He believes investors should approach gold the same way they approach other assets and periodically rebalance portfolios after substantial gains."If the Nifty tripled tomorrow, I would advise my clients to book profits and rebalance. Why should gold be treated differently? Investors should book 1-3% of profits instead of assuming gold can only move in one direction."Applauds HDFC AMC's DecisionAzeez strongly welcomed HDFC AMC's move and called on other fund houses to consider similar measures."I am very happy and excited that HDFC has done this. In fact, when this entire campaign started, I had proposed that AMCs should stop accepting gold inflows."He praised HDFC AMC CEO Navneet Munot and the fund house's leadership for sending a strong message on responsible asset allocation."India already has 28% of household wealth in gold and only around 1.8% in equity mutual funds. We are not here to sell what sells. We are here to make asset allocation correct."Azeez concluded by reiterating that Indian households remain heavily skewed toward real estate and gold, and that a gradual shift toward productive financial assets such as equities would be healthier for long-term wealth creation."I hope the industry follows suit. Indians already have enough gold. The country's asset allocation remains heavily tilted toward real estate and gold, and that needs to change."