Leading the pack is theNippon India Silver ETF, which has delivered an exceptional145% return over three years. Other top performers include Axis Silver ETF (144%), Aditya Birla Sun Life Silver ETF (139%), and HDFC Silver ETF (132%). These funds have capitalized on silver's powerful bull run, with most registering approximately 51% gains in the past year alone.
Why are Silver ETFs gaining popularity?
Silver ETFs function like mutual funds that track the price of silver. The fund house purchases physical, 99.9% pure silver, and the ETF's value fluctuates with the market price. Investors can buy and sell units through their demat accounts on stock exchanges, just like shares. The primary advantages include the ability to start with very small amounts (as low as Rs.100-150), zero storage concerns, and high liquidity.
Expert Outlook and Key Considerations
Market analysts attribute silver's strength to booming industrial demand, particularly from the solar panel, electronics, and electric vehicle sectors. Many experts project prices could reach ₹1,40,000 per kilogram before the end of the year.
When selecting a Silver ETF, investors are advised to consider the fund house's track record, the ETF's expense ratio, and its tracking error (how closely it follows silver prices). Given the metal's inherent volatility, a long-term investment horizon of 3-5 years is recommended to navigate short-term price fluctuations.
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