Mirae Asset Mutual Fund, one of the fastest-growing fund houses in India, today announced the launch of Mirae Asset Silver ETF (An open-ended scheme replicating/tracking Domestic Price of Silver).
The New Fund Offer (NFO) opens on May 29, 2023 and closes on June 06, 2023. Scheme re-opens for continuous Sale & Repurchase on June 12, 2023. Listing of ETF units on stock exchanges i.e. BSE & NSE will be done within
5 days from the date of allotment. Mirae Asset Silver ETF will be managed by Mr. Ritesh Patel. During the NFO, an investor can invest a minimum
of Rs. 5,000 and in multiples of Re. 1 thereafter.
To counter adverse movements in a particular asset or asset classes, investors can achieve effective diversification in their portfolios by incorporating alternative
investments such as commodities. In India, investing in gold and silver ETFs are two most prominent investment strategies to gain exposure in commodity segment without the need to trade commodities or derivatives. These
ETFs provide investors with the opportunity to invest in precious metals in the digital format instead of investing in physical gold and silver. To varying degrees, both gold and silver may provide a hedge in a potential
economic or market downturn, as well as during sustained periods of rising inflation.
The Asset Under Management (AUM) of commodity-based ETFs have seen an uptick in the past 3 years* with AUM increasing at a 35% CAGR rate from INR 10,081 Crores to INR 24,718 Crores. With Securities and Exchange Board of India
(SEBI) allowing ETFs based silver, 8 silver-based ETFs were launched by Mutual Fund Houses in the year 2022 which are now managing assets worth INR 1,785 Crores.
Source: AMFI data & Ace MF as on 30th April 2023.
*Past 3 years: Period is April 2020 to April 2023
Why to Invest in Silver ETF:
- Silver tends to act as hedge against the inflation and rising dollar movement also unlike Gold, Silver has significant usage in industrial applications.
- There are several trends driving up silver demand, including consumer electronics growth, investment in 5G infrastructure and rising silver use in the green economy – especially in solar photovoltaic (PV) panels.
- In last 5 years, Silver has given return of 13.1% v/s 12.3% by Nifty 50 Index and 13.0% by Gold (As on April 30, 2023).
- ETF is a relatively low-cost and easy option to take exposure in silver as it provides the convenience of buying and selling on stock exchanges just like stocks
- For last two years i.e. 2021 and 2022, the demand for silver has exceeded the supply, however, the price has not moved significantly due to other macro-factors. Cooling down of factors will bring back attention
to supply deficit
Siddharth Srivastava, Head - ETF Product, Mirae Asset Mutual Fund said, “Silver is widely considered to be a relatively in times of economy turmoil and a good hedge against dollar, just like gold. In addition to these factors, silver price has found support from its growing use in industrial settings, which now accounts for roughly half of the silver annual demand. These factors make silver a very compelling asset to be included in an investor’s portfolio either from a long-term point of view or for tactical allocation based on various technical indicators.”
Mirae Asset Silver ETF will be benchmarked on the basis of domestic silver price based on the London Bullion Market Association (LBMA) silver daily spot fixing price.
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