Markets Regulator, Securities and Exchange Board of India (SEBI), in its board meeting on Tuesday, allowed mutual fund houses to introduce Silver Exchange Traded Funds (ETFs) in the Indian market.
Contrary to this there is no silver ETF gold etf Which are backed by physical gold in India. The launch of Gold and Crude Oil ETFs has been a long standing demand of the industry in India.
Experts say precious metals like silver, platinum and palladium can be a way to diversify one’s portfolio, away from a single precious metal.
The Board of SEBI met under the chairmanship of Ajay Tyagi in Mumbai today.
In a notification after the board meeting, SEBI said, “The Board approved amendments to the SEBI (Mutual Funds) Regulations, 1996, to provide for silver exchange-traded funds with certain safeguards in line with the existing regulatory mechanism for gold ETFs.” to be started.”
Gold along with silver has been the preferred investment class for Indians over the past several decades.
Nippon India ETF Gold BeES is the largest Gold ETF in India with high Assets Under Management (AUM) ₹6,000 crores. It is followed by HDFC Gold ETF and SBI ETF Gold with AUM ₹2,682 crore and ₹2,354 crore respectively.
“We welcome SEBI’s decision to allow the launch of Silver ETFs in India. This expands the bouquet of ETFs available to investors. The physical silver market in India is deep enough to support silver ETFs. Gold The ETF has been in existence since 2007 and continues to see rapid expansion in the investor base,” said Vishal Jain, Head – ETFs, Nippon Life India Asset Management Ltd.
Since these funds closely track the performance of gold prices, most of the schemes have turned red by 10% on a yearly basis.
Experts say that even though silver is often linked to gold, it may have its own independent demand and supply dynamics.
Since as per SEBI, Silver ETFs can be launched in line with the existing regulatory mechanism of Gold ETFs, the existing regulations may give us an indication as to how the new asset class might function in India.
According to the Association of Mutual Funds in India (Amfi), a gold ETF unit represents physical gold, which can be in paper or dematerialized form. One gold ETF unit is equal to 1 gram of gold and contains physical gold of high purity.
Gold ETFs are listed and traded on the National Stock Exchange of India (NSE) and Bombay Stock Exchange Limited (BSE) like any company stock.
Buying gold ETFs means that you are buying gold in electronic form.
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