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Silver ETFs: Silver ETFs have emerged as a popular investment option, with assets under management (AUM) seeing a remarkable four-fold increase in the last one year. It reached Rs 12,331 crore in October 2024 from Rs 2,844.76 crore in October last year. ICRA Analytics said that this surge has increased investor interest in silver amid domestic inflationary pressures and geopolitical uncertainties.
According to ICRA Analytics, silver ETFs introduced in 2022 have gained popularity among retail investors due to their accessibility and transparency. The total number of folios under silver ETFs grew 215 percent to 4.47 lakh in October 2024 from 1.42 lakh a year ago. Net inflows grew 24 percent year-on-year to Rs 643.10 crore during the same period.
Senior Vice President and Head (Market Data) Ashwini Kumar said that the number of silver ETFs in the market increased from eight in April 2023 to 12 in August 2024. He said, "Silver ETFs are preferred over physically purchased silver, as they can be easily 'stored'. ... The cost associated with GST on purchase is low. They provide a more efficient and liquid investment option, as they are listed on the stock market, allowing investors to trade the units seamlessly. "
The investment performance of silver ETFs has also been remarkable. The average returns over one-month, three months, six months, and one-year periods were 7.57 percent, 16.02 percent, 20.25 percent, and 32.49 percent respectively, which was better than the returns from gold ETFs over the same period. Kumar said the demand for silver ETFs is likely to remain strong due to continued inflationary pressure and geopolitical instability. He said, "More silver ETFs may be introduced in the coming months as their role in segment diversification increases."
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