NFO Alert: SBI Mutual Fund Launches SBI Silver ETF & SBI Silver ETF FoF

SBI Mutual Fund announce a SBI Silver Exchange Traded Fund (ETF) and the fund of funds routes to it. Read on to know the investment considerations and past performance of silver.
SBI Mutual Fund Launches SBI Silver ETF & SBI Silver ETF FoF
SBI Mutual Fund Launches SBI Silver ETF & SBI Silver ETF FoF

SBI Mutual Fund announced the launch of the SBI Silver Exchange Traded Fund (ETF) and the fund of fund route to it- SBI Silver ETF Fund of Fund.

In contrast to gold, silver is widely used in industrial applications, the fund house said and the price of silver has been steadily rising over the past few years as per per Association of Mutual Funds of India (AMFI) data.

NFO Details

The New Fund Offer of SBI Silver ETF runs from June 24 to 27, 2024. The minimum application amount during the NFO period would be Rs. 5,000 per application and in multiples of Re. 1 thereafter. Typically no exit loads are involved in ETFs.

Since ETFs are traded on the stock exchange, to invest in them, one must have a demat account. Another route is to invest in ETFs through the fund-of-fund route.

As this alternate route, SBI Mutual Fund has introduced the SBI Silver ETF Fund that invests in units of MSBI Silver ETF. The NFO for this Fund of Fund will run from June 27 to July 5, 2024.

Shamsher Singh, MD & CEO, SBI Funds Management Limited said, “In today’s global economic scenario, there is an increased demand for metals to play the role of inflation hedge. Unlike its better-known counterpart Gold, Silver finds a lot of use in industrial applications and this flexibility helps 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.”

D P Singh, Deputy MD & Joint CEO, SBI Funds Management Limited, said, "Silver is an industrial metal with potential demand linked to electronics and renewable energy, thus improving its long-term growth potential. Investing through an ETF and Fund of Fund gives investors a low-cost investment option and the advantage of liquidity.” Investors who invest in commodities but currently don’t look beyond gold may consider silver, Singh added.

Investment Philosophy

SBI Silver ETF will invest 95 per cent to 100 per cent of its assets in silver or silver-related instruments. SBI Silver ETF Fund of Funds will invest 95 per cent to 100 per cent of its assets in units of SBI Silver ETF.

The balance of up to 5 per cent would be invested in Government securities (like G-Secs, SDLs, treasury bills and any other like instruments as specified by the RBI from time to time), including triparty repo and units of liquid mutual funds.

The returns based on the surge in the domestic price of silver is 24.10 per cent in one year as per Association of Mutual Funds of India data.

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