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Silver has given an impressive return of 20.25 per cent in the past six months, compared with gold’s return of 10.29 per cent.
The total number of folios under silver ETFs increased by nearly 215 per cent to touch 4.47 lakh in October 2024.
Silver sales witnessed a sharp spike in the recent weeks, especially ahead of Dhanteras this year. Investors not only bought it in physical form but also in the form of exchange-traded funds (ETF). Silver has given an impressive return of 20.25 per cent in the past six months, compared with gold’s return of 10.29 per cent.
Rating agency ICRA in its report said the total number of folios under silver ETFs increased by nearly 215 per cent to touch 4.47 lakh in October 2024, up from 1.42 lakh in the same period last year. Net inflows grew by 24 per cent at Rs 643.10 crore in October 2024, as against Rs 518.02 crore last year.
Silver ETFs registered an unprecedented surge with the assets under management (AUM) growing by over four-fold to touch Rs 12,331 crore in October 2024, up from Rs 2,844.76 crore in October 2023, it added.
While gold ETFs have been in the market for quite some time now, silver ETFs were launched as recently as 2022.
| Average Returns (in %) | ||||
| 1 Month | 3 Months | 6 Months | 1 Year | |
| Silver ETFs | 7.57 | 16.02 | 20.25 | 32.49 |
| Gold ETFs | 5.32 | 14.29 | 10.29 | 28.07 |
Note: Returns as on October 31, 2024. (Source: ICRA Analytics)
According to ICRA, the average returns for a 1-month, 3-months, 6-months and 1-year period was in the range of 7.57 per cent, 16.02 per cent, 20.25 per cent and 32.49 per cent respectively. This is in contrast to an average return of 5.32 per cent, 14.29 per cent, 10.29 per cent and 28.07 per cent generated by Gold ETFs over 1-month, 3-months, 6-months and 1-year duration respectively.
| Absolute | Compound Annualised | |||
| Scheme Name | 1 Month | 3 Months | 6 Months | 1 Year |
| UTI Silver Exchange Traded Fund | 8.07 | 16.80 | 19.17 | 33.13 |
| Nippon India Silver ETF | 7.58 | 15.94 | 19.82 | 32.27 |
| Mirae Asset Silver ETF | 7.57 | 15.96 | 19.87 | 32.36 |
| Kotak Silver ETF | 7.60 | 16.03 | 19.96 | 32.49 |
| HDFC Silver ETF | 7.58 | 15.97 | 22.53 | 33.00 |
| DSP Silver ETF | 7.59 | 16.04 | 20.09 | 32.57 |
| Axis Silver ETF | 7.60 | 16.04 | 21.98 | 31.43 |
| Aditya Birla Sun Life Silver ETF | 7.62 | 16.05 | 20.03 | 32.61 |
Note: Absolute returns for less than 1 year; compound annualised returns for greater than or equal to 1 year. Returns as on October 31, 2024. (Source: ICRA Analytics)
Ashwini Kumar, senior vice-president and head (market data) at ICRA Analytics, said, “The number of silver ETFs, which stood at 8 in April 2023, has increased to 12 in August 2024. If domestic inflationary pressures and geopolitical instability continue to persist, then silver may continue to witness upbeat demand. The market may see the launch of more Silver ETFs in the coming months as its role in investor portfolio diversification, investment and management becomes more crucial.”
Silver ETFs managed to garner the attention of the investors within a short period of time. It is being increasingly preferred over physical form as investing in physical silver is challenging due to storage-related issues, he added.
“Silver prices are expected to remain attractive as the expectation is that the U.S. Federal Reserve will continue to cut interest rates in the coming months giving a boost to silver prices. Besides, geopolitical tensions may prompt risk-averse investors to invest in safe-haven assets like silver. Demand for silver is expected to remain upbeat due to its usage in electronics and green technologies. Moreover, investors often prefer investment in silver for portfolio diversification and it is often seen as a hedge against inflation. This apart, cut in customs duty and change in taxation structure has made silver investment more attractive,”
Kumar said.
