Why should you consider silver ETFs over other options? 3 experts weigh in
Silver ETF is the new kid on the block in the mutual fund (MF) investments landscape. The oldest fund in the group was launched only 28 months ago.
But they have managed to attract the attention of investors within a short span. Two silver ETFs alone have garnered assets under management (AUM) of about ₹5400 crore.Prices of precious metals such as silver have been on the rise this year due to geopolitical uncertainties and persistently high inflation.
Silver, which is often referred as poor man’s gold, outshone the yellow metal this year by gaining about 19% on a YTD (year-to-date) basis in the Mumbai market. In contrast, prices of 22-carat gold have moved up by only 12.8% so far in the year.Silver prices touched a record high of nearly ₹1 lakh per kg last week in the Mumbai market.
“The positive momentum (for silver) is relatively stronger than gold, mainly because of latest data indicating improving industrial outlook in the US," analysts at Religare Broking said.“The white precious metal continues to gain from its use in solar panels, which is set to reach a new high this year, pushing the silver market into its fourth consecutive deficit (year). Silver in the present term appears relatively stronger than gold," the analysts explained.
Unlike gold, the white metal is widely used in industrial applications, which has been going up steadily over the past few years.Investors had to watch from the sidelines whenever silver prices shot up in the past as the only way they could gain from any rally was to buy silver bars or ornaments. But with digital silver in the form of ETFs making its foray about 2 ½ years ago, investors can instantaneously benefit from any rally in the white metal now.The category may be quite new but
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