SBI Mutual Fund has launched SBI Silver ETF and SBI Silver ETF Fund-of-Fund.
Silver ETF will primarily invest 95-100 per cent in silver and silver-related instruments, while the Silver ETF Fund of Fund would invest a 95-100 per cent in units of SBI Silver ETF. The balance of the assets will be invested in Government securities, including triparty repo and units of liquid mutual funds. The minimum application amount during the NFO period will be ₹5,000 per application. The NFO opens on June 27.
The Silver ETF targets to generate returns that are in line with the performance of physical silver in domestic prices, subject to tracking error. The Silver ETF Fund of Fund seeks to provide returns that closely correspond to returns provided by SBI Silver ETF.
Shamsher Singh, MD & CEO of SBI Funds Management, said that unlike gold, silver is widely used in industrial applications and helps to increase its value in the long term.
Hence, investors looking to diversify into commodities can choose to invest through the Silver ETF or Fund of Fund offering and have the opportunity to be a part of its long-term growth prospects, he said.
DP Singh, Deputy MD and Joint CEO, SBI Funds Management said silver demand is linked to the potential rise in sectors such as electronics and renewable energy.
He added that investing through an ETF and Fund of Fund gives investors a low-cost investment option and the advantage of liquidity.