The asset under management (AUM) of silver Exchange Traded Fund (ETF) has crossed ₹13,500 crore since market regulator SEBI approved the product in November 2021.
In all, there are 12 silver ETFs with more than six lakh investor folios across them as of January.
Vaibhav Jalan, CBO, Zerodha Fund House, said the increasing transaction volumes of silver ETFs are a clear indication of growing investor interest.
These ETFs offer an alternative to physical silver ownership, addressing concerns on storage, security and insurance while providing access to silver’s price movements, he added.
Since 2021, the demand for silver has outpaced its supply. This versatile metal is both a valuable commodity and a crucial component in various industries, including solar energy and automotive manufacturing.
Silver’s diverse applications, from industrial uses to jewellery, digital photography and investment also contribute to its demand.
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According to the Silver Institute estimate, the overall industrial demand for silver has increased over 55 per cent driven by its applications across various industries, including automotive, technology, pharmaceuticals and solar energy. Silver is also used in manufacturing and industrial fabrication since it does not corrode and has good thermal properties.
Vishal Jain, CEO of Zerodha Fund House, said silver has the potential to play a role in both investment portfolios and modern industries.
Silver ETFs are a valuable tool to diversify portfolio and capitalise on the metal’s unique characteristics, he said.
As investors seek diversification and exposure to commodities, silver ETFs provide a simple and hassle free way to take exposure to this precious metal.
