Silver ETFs Stay Atrractive: AUM Soars Over Four-Fold To Rs 12,331 Crore In October

Silver ETFs have emerged as a popular investment avenue, with their assets under management witnessing a remarkable four-fold growth in the past year, touching Rs 12,331 crore in October 2024, up from Rs 2,844.76 crore in October last year.

The surge coincides with rising investor interest in silver as a hedge against domestic inflationary pressures and geopolitical uncertainties, ICRA Analytics said.

Silver ETFs, launched in 2022, have gained traction among retail investors due to their accessibility and transparency, according to ICRA Analytics. The total number of folios under Silver ETFs rose by 215% to 4.47 lakh in October 2024, compared to 1.42 lakh a year ago.

Net inflows grew 24% year-on-year to Rs 643.10 crore during the same period, the note said.

Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics, highlighted that the number of silver ETFs in the market increased from 8 in April 2023 to 12 in August 2024.

“Silver ETFs are preferred over physical silver due to easier storage, better liquidity, and lower costs associated with GST on physical silver purchases. They offer a more efficient and liquid investment option as they are listed on exchanges, enabling investors to trade units seamlessly,” he said.

The investment performance of silver ETFs has also been noteworthy. Average returns over 1-month, 3-month, 6-month, and 1-year periods were 7.57 per cent, 16.02 per cent, 20.25 per cent and 32.49 per cent respectively, outperforming gold ETFs, returns over the same durations.

Kumar added that with sustained inflationary pressures and geopolitical instability, demand for silver ETFs is likely to remain robust.

“As their role in portfolio diversification grows, more silver ETFs could be launched in the coming months,” he said.

An ETF (Exchange Traded Fund) is a marketable security that tracks an index, a commodity or bonds or a basket of assets.