Aditya Birla Sun Life: ABSL Mutual Fund will launch a silver ETF, FOF

Aditya Birla Sun Life Mutual Fund announced on Wednesday the launch of the Silver ETF and the Silver ETF Fund of Fund (FoF). The new fund offering (NFO) of both schemes will open on January 13 and close on January 27.

The minimum investment required during the NFO of Silver ETF is Rs 500; For Silver ETF Fund of Fund, the minimum investment amount required during NFO is Rs 100.

The fund house said its goal of launching the FoF with the ETF is that those without a demat account can also participate in the asset class through the FoF.

The ETF would track physical silver and the performance of the system would be compared to the price of silver in rupees.

“We offer silver in both formats – ETFs and funds of funds – for investors and partners to participate in their choice of vehicles. Silver is one of the most versatile metals that has high demand for (household) consumption, investment demand and now ever-increasing industrial demand,” the fund house said.

The asset management firm pointed out that the outlook for silver is bright due to emerging demand trends.

“Indians have traditionally been big investors in silver through festive and celebratory demand for coins, figurines, ornaments and silverware. Global demand for electric vehicles, batteries and accessories “Solar will also drive industrial demand for silver. With a strong supply-demand mismatch, silver could surprise the market in terms of asset class performance,” said Abhishek Singhal, Head – Strategies passive and alternative, Aditya Birla Sun Life Mutual Fund.

Several fund companies rushed to launch silver ETFs after Sebi authorized mutual fund companies to introduce silver ETFs in October 2021. In November, SEBI set operating standards for the introduction of silver ETFs. ‘Silver ETFs’, that these ETFs must invest at least 95% of their net assets in silver and silver-related instruments.

ICICI Prudential Mutual Fund announced the launch of the country’s first silver ETF last week. The NFO of its silver ETF opened for subscription on January 5 and will close on January 19.

Nippon India Mutual Fund (NIMF) on Wednesday announced the launch of Nippon India Silver ETF and Nippon India Silver ETF Fund of Fund (FoF) which will invest in shares of Nippon India Silver ETF. New fund offerings from both plans will open on January 13 and close on January 27.

Fund houses such as HDFC Mutual Fund and DSP Mutual Fund have also filed draft documents for new silver ETFs.

If you want to know if you should invest in silver ETFs, you can read this article: Mutual funds ready to launch silver ETFs; are you ready to invest?

Dolores W. Simon