ICICI Prudential AMC Launches Industry’s First Silver ETF

MAS Team 07 January 2022

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.

User

Changes in Our Business Model

Greetings from Moneylife Advisory Services

Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular

As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.

While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:

What remains the same:

Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
The magazine and all textual content will remain as part of the service
The investools will have to be reworked and will offer model portfolios. We will have to suspend the restructuring tool.

What changes:

The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.

Over the next few weeks our site and our communication to you will reflect these and other additional changes.

We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.

Debashis Basu

Founder

ICICI Prudential AMC Launches Industry’s First Silver ETF

User

To continue

We are listening!