New Delhi: Axis Mutual Fund has announced the launch of Silver Exchange Traded Funds (ETFs) and Fund of Funds (FOFs), which are open-ended schemes that mimic or track the domestic price of the precious metal.
Both the funds will be benchmarked against the London Bullion Market Association (LBMA) Silver Daily Spot AM fixing price. The new fund offer for both the schemes open for subscription on September 2 and will close on September 15.
Prateek Tibrewal, Fund Manager, Commodities, will manage Axis Silver ETF and the minimum application amount will be 500 per application and in multiples of Rs. 1, after that.
Fixed Income Fund Manager Aditya Pagaria will manage Axis Silver FoF.
According to the fund house, investing in the physical form of silver can pose challenges over time with respect to corrosion, safety, purity of the metal, liquidity risk etc. “Investors can choose to get exposure to the precious metal through ETFs that aim to generate returns consistent with the performance of physical silver in domestic prices, subject to tracing error. Investors who do not have a demat account can get exposure by investing in Silver FoF.”
The fund house believes that silver has wide usage across multiple sectors, creating a unique opportunity for investors.
The metal has gained acceptance in industries such as bio pharma and medical technologies, power generation and clean energy, and electric vehicles and mobility technologies.
In addition, silver also has the ability to provide a hedge against inflation.
Both the funds will invest in industry standard 30 kg physical silver bullion at 999 parts per 1000 fineness. In addition, Axis AMC will take care of the storage, transportation and insurance related hassles of silver.
Chandresh Nigam, MD & CEO, Axis AMC said, “The interesting proposition of silver in that it has the potential to function as an industrial commodity as well as a precious metal is a key factor that we believe will increase its importance. Now that investors have access to invest in silver through ETFs, it will further enhance the value of the metal as a promising asset class in the future.”
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