Spot silver prices in the country have zoomed over 40% in the past one year, generating interest among investors towards other silver-based investment instruments. Silver exchange-traded funds (ETFs) are now becoming popular among investors. SEBI gave its go-ahead to silver ETFs in September 2021. Let’s understand silver ETF!
Silver ETFs are exchange-traded funds that can be bought and sold on the stock exchange. Since the benchmark of silver ETF is based on spot silver prices, you can buy it close to the actual price of silver.
Benefits of investing in Silver ETF
Through ETF, you can invest in silver units, which makes it easy to buy silver in small quantities or through Systematic Investment Plan (SIP).
Silver ETF is kept in a demat account, in which only annual demat charge has to be paid. Apart from this, there is no fear of theft. On the other hand, additional expenses have to be incurred to keep physical silver safe, and there is also a risk of theft.
Silver ETF can be easily bought and sold like stocks. In this way, if you need money, you can sell it anytime.
Also read: Gold or Gold ETF: What should you buy on Dhanteras? Returns of 1, 3 and 5 years compared!
Why should one invest in Silver ETF?
Silver is now becoming an influential bullion (precious metal). According to experts, whenever economies strengthen, the demand for silver starts increasing. One meaning of this is that when inflation rises, the price of silver increases more than gold. In this way, silver can prove to be a better way to protect against inflation.
How to invest in silver ETFs?
You need a demat account to buy silver ETFs. You can buy units of silver ETFs available on NSE or BSE, and that amount will be deducted from the bank account linked to your demat account. You can use apps like Groww, Upstox, or Paytm to open a demat account for free. After this, you can select the silver ETF as per your choice.
Top 10 silver ETFs in the past one year
| ETFs | Market Cap | 1-Year Return | Expense Ratio |
| UTI Silver Exchange Traded Fund | Rs 120 Cr | 32.80% | 0.52 |
| Aditya Birla Sun Life Silver ETF | Rs 450 Cr | 31.89% | 0.35 |
| DSP Silver ETF | Rs 231 Cr | 31.62% | 0.50 |
| ICICI Prudential Silver ETF | Rs 3714 Cr | 31.55% | 0.40 |
| Kotak Silver ETF | Rs 713 Cr | 31.47% | 0.45 |
| Mirae Asset Silver ETF | Rs 82 Cr | 31.36% | 0.40 |
| Nippon India Silver ETF | Rs 4,777 Cr | 31.26% | 0.56 |
| HDFC Silver ETF | Rs 321 Cr | 30.80% | 0.40 |
| UTI Silver ETF FoF | Rs 33 Cr | 30.80% | 0.50 |
| HDFC Silver ETF FoF – Regular Plan | Rs 139 Cr | 30.78% | 0.60 |
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.