Silver ETFs’ asset base touches Rs 1,800 cr

New Delhi: Silver exchange-traded funds (ETFs) are becoming popular among investors as the newly-created investment class has attained an asset base of nearly ?1,800 crore till March 2023 within one-and-a-half years of the introduction of the product by markets regulator Sebi.

Silver ETFs are following the trajectory of Gold ETFs as the ETF route offers the assurance of metal purity, no storage hassles of the physical metal, and ease of buying, said Hemen Bhatia, head-ETF, Nippon Life India Asset Management.

According to data from the Association of Mutual Funds in India (Amfi), the industry has seven silver ETFs – Nippon India Silver ETF, ICICI Prudential Silver ETF, Aditya Birla Sun Life Silver ETF, HDFC Silver ETF, Axis Silver ETF, Kotak Silver ETF, and DSP Silver ETF – with an asset under management of ?1,792 crore as of March 2023. All these funds were launched in 2022. In addition UTI Silver Exchange Traded Fund was launched in April this year.

Of these, Nippon India Silver ETF and ICICI Prudential Silver ETF contributed 80% of the total AUM.

Kaustubh Belapurkar, manager-research at Morningstar India, said that silver prices were volatile in the first half of 2022 on the back of rising interest rates. More recently, silver prices have witnessed significant appreciation over the last six months. “Investors have been adding positions in Silver ETFs over the past year given its additional sheen of increasing demand from industrial uses,” he added.