Silver ETF

Precious metals like gold and silver have strong cultural significance in India. Gold and silver are also seen as store of value since ancient times. Most Indian households prefer to invest and hold gold and silver in physical form. However, investors in developed markets prefer to invest in gold or silver as financial assets e.g. Exchange Traded Funds (ETFs). Gold ETFs were launched for the first time in India around 15 years back, but Silver ETF is relatively new. In this article, we will discuss about Silver exchange traded fund or Silver ETF.

Why invest in silver?

  • Silver is considered to be a very important and auspicious metal in India. Many Indian households traditionally like to buy silver on important auspicious occasions like Deepawali, Dhanteras, Ugadi and Akshay Tritiya, etc. Following Indian social and cultural traditions, silver utensils and jewelleries are often gifted to newlywed couples or new born babies on occasions like Annaprashana, birthdays, etc. With economic growth and rising per capita income in India, demand for silver is likely to increase in the future.
  • Silver is also an important metal for use in industries like solar panels, electric vehicles, smartphones and advanced electronics, etc. As these new age industries are growing very fast, the demand of silver for industrial use is expected to rise significantly in the future.
  • Though industrial demand is rising, the supply of silver is relatively constrained. Therefore, there is considerable scope of higher returns on investment from silver.
  • Like Gold, Silver is also seen as a store of economic value over the long term period. Over a long drawn out time period silver can retain its purchasing power, and is therefore, has traditionally seen as one of the safest assets in India.
  • Silver, as an asset class, can be useful for your portfolio asset allocation purposes as you can diversify the portfolio risks because silver has low correlation with equities.
  • It has been seen that often Silver has outperformed gold returns in bull-markets. Hence it can add into further portfolio diversification or asset allocation in your investments.

Why Silver ETFs are better investments than physical silver?

Since Silver ETFs are relatively new, most Indian households still buy silver in physical form e.g. silver jewellery, silver coins, bars and biscuits. The main problem with physical silver as an investment is impurity. Most silver jewelleries will have impurities. The impurities will be deducted from the price of silver when you are selling. The other problem with silver jewellery is maintenance as it requires regular cleaning / polishing to remove the tarnishes and maintain glaze. Finally, you need to incur storage costs (example – bank locker rent) for silver jewellery, bars and coins. Silver ETF Fund is a cost efficient way of investing in silver as there is no risk of impurities, no maintenance and no storage costs are involved. They can be much more convenient, cost efficient and liquid investments compared to physical silver.

What is Silver ETF?

Silver ETFs are financial instruments which track the price of pure silver. These instruments invest in physical silver or silver related instruments. Physical Silver of 30 kg bars with fineness of 999 parts per thousand (or 99.9% purity) conforming to London Bullion Market Association (LBMA) Good Delivery Standards are only permitted by SEBI for Silver ETF India funds.

Why invest in Silver ETF?

  • Purity is a very important consideration in purchasing physical silver. Silver ETF would invest in physical silver of high purity (999 parts per thousand purity) conforming to the standards of London Bullion Market Association (LBMA).
  • Physical silver requires much more storage space and costs. As Silver ETF is a financial asset, there are no storage costs and is a much more cost efficient investment option.
  • Liquidity is the most important consideration in any physical asset you invest, especially silver. ETFs are highly liquid investments. You can sell units of Silver ETFs on any trading day in the stock market. Silver ETF India fund NAVs are available on AMC websites who have Silver ETF funds or on the website


Investors should consult with their mutual fund distributors/ financial advisors to know what is flexi cap mutual funds and if it is suitable for their investment needs basis their risk profile.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.


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The information contained in this document is compiled from third party and publically available sources and is included for general information purposes only. There can be no assurance and guarantee on the yields. Views expressed by the Fund Manager cannot be construed to be a decision to invest. The statements contained herein are based on current views and involve known and unknown risks and uncertainties. Mirae Asset Investment Managers (India) Private Limited (the AMC) shall have no responsibility/liability whatsoever for the accuracy or any use or reliance thereof of such information. The AMC, its associate or sponsors or group companies, its Directors or employees accepts no liability for any loss or damage of any kind resulting out of the use of this document. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein. Any reliance on the accuracy or use of such information shall be done only after consultation to the financial consultant to understand the specific legal, tax or financial implications. Investors are advised to read the Scheme Information Document of the respective scheme to know in detail about the product before investing.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.