News | Mutual Funds

ICICI Prudential AMC Launches Industry’s First Silver ETF

MAS Team 07 January 2022
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ICICI Prudential Mutual Fund has announced the launch of country's first silver exchange traded fund (ETF). The new fund offer (NFO) opened for subscription on 5th January and will close on 19th January.
 
In November 2021, Securities and Exchange Board of India (SEBI) issued operating norms for the introduction of silver ETFs. Under the rules, these ETFs have to invest at least 95% of their net assets in silver and silver-related instruments.
 
The ICICI Prudential Silver ETF is an open-ended scheme that will track the domestic prices of silver. The scheme will invest its proceeds in physical silver and silver-related instruments.
The investment objective of the scheme is to generate returns that are in line with the performance of physical silver in domestic prices as derived from the LBMA (London Bullion Market Association) AM fixing prices.
 
Unlike holding physical silver, the fund house said that an investor can benefit from investing in silver ETFs as it provides more liquidity and less storage cost.
 
"We believe silver ETF will be one of the preferred ways for investors to take exposure to silver as one need not worry about the bulky nature of silver, purity, quality or liquidity of the investment," Chintan Haria, Head Product and Strategy, at ICICI Prudential Mutual Fund, said.
 
He, further, said that silver is among the preferred option globally when it comes to investing in precious metals. This is because silver is considered as a store of value, hedge against inflation and has a very limited co-relation with other asset classes.
 
According to the AMC, given its low correlation with other asset classes, investors may consider taking exposure to silver as a part of their portfolio diversification exercise.
 

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