Over the past decade, the demand for Silver has been driven by industrial usage, renewable energy, and investment instruments. Silver has provided reasonably consistent returns through all the phases of the economy when compared with other asset classes. It provides a natural hedge to investors during bear phases and is receptive to market movements during bull phases. This makes Silver a very desirable option for portfolio diversification. Silver-backed ETFs have been lately introduced in India as a new investment option for investors.<\/p>\n\n\n\n

Properties like malleability, ductility, reflectiveness, noble nature, thermal & electrical conductivity have made Silver useful & valuable over age and time. In the coming years, India’s commitment to sustainable energy will gradually raise demand for silver, with EVs and batteries seeing a compounding demand. The outlook for silver is bright due to emerging trends in demand.<\/p>\n\n\n\n

In November 2021, SEBI announced operating norms for the introduction of silver ETFs, as per which, these ETFs have to invest not less than 95% of their assets in silver and silver-related devices. Accordingly, many fund houses have been aiming to launch silver ETFs, while ICICI Prudential Mutual Fund<\/a> & Nippon India Mutual Fund<\/a> have recently launched India’s first Silver ETF.<\/p>\n\n\n\n

Joining the band wagon, Aditya Birla Sun Life Mutual Fund<\/a> has come up with Aditya Birla Sun Life Silver ETF and Aditya Birla Sun Life Silver ETF Fund of Fund. <\/strong>The fund house stated, “We are offering silver in both – ETF and Fund of Fund – formats for investors and partners to participate in their choice of vehicles. The reason behind the launch of the FoF together with the ETF is that those that do not have a demat account may take part in this asset class by the FoF option. Silver is one of the most versatile metal commodities that have strong (household) consumption demand, investment demand, and now an ever-increasing industrial demand.”<\/p>\n\n\n\n

On the launch of these funds, Mr Abhishek Singhal, Head – Passive & Alternative Strategies at Aditya Birla Sun Life Mutual Fund, said, “Indians have traditionally been large investors in silver through festive and celebratory demand for coins, figurines, ornaments, and silverware. Global demand for EVs, batteries, and solar energy will also drive industrial demand for silver. With a large demand-supply mismatch, silver could surprise the market in terms of asset class performances.”<\/em><\/p>\n\n\n\n

Table 1: Details of Aditya Birla Sun Life Silver ETF<\/em><\/strong><\/p>\n\n\n\n