Asset management company ICICI Prudential Mutual Fund has announced the launch of the country’s first Silver ETF that will invest in silver and silver related instruments.
The new fund offer (NFO) will open for subscription on January 5 and end on January 19.
Besides this, asset management companies are vying for their silver ETFs for launch and have on file documents with markets regulator SEBI for approval in this regard.
HDFC Mutual Fund, Nippon India Mutual Fund, Mirae Asset Investment Managers, Aditya Birla Sun Life Asset Management Company and DSP Mutual Fund are among the fund houses that have applied for the Silver ETF.
This comes after SEBI in November released the operating norms for the launch of Silver ETFs. Under the rules, these ETFs must invest at least 95 per cent of their net assets in silver and silver-related instruments.
ICICI Prudential Silver ETF is an open ended scheme that will track domestic silver prices. The scheme will invest its proceeds in silver and silver related instruments.
The investment objective of the scheme is to generate returns commensurate with the performance of physical silver in domestic prices derived from LBMA (London Bullion Market Association) AM fixing prices.
Unlike holding physical silver, the fund house said an investor can benefit from investing in silver ETFs because it provides greater liquidity and lower storage costs.
“We believe that silver ETFs will be one of the preferred ways for investors to invest in silver as one does not have to worry about the bulky nature, purity, quality or liquidity of the investment,” he said. Hariya, Principal Product & Strategy, ICICI Prudential Mutual Fund said.
He further added that silver is the preferred choice globally when it comes to investing in precious metals. This is because silver is considered a store of value, a hedge against inflation and has very limited correlation with other asset classes.
On Thursday, DSP Mutual Fund filed draft scheme information document with SEBI for DSP Silver ETF – an open-ended exchange traded fund tracking domestic prices of the precious metal.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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