The asset under management (AUM) of silver Exchange Traded Fund (ETF) has exceeded ₹13,500 crore ever since it was approved by market regulator SEBI in November 2021. As of January, there are a total of 12 silver ETFs with over six lakh investor folios among them.
Vaibhav Jalan, Chief Business Officer at Zerodha Fund House, emphasized that the rising transaction volumes of silver ETFs signify a growing interest among investors. These ETFs provide an alternative to owning physical silver, addressing concerns such as storage, security, and insurance, while offering exposure to silver price movements.
Since 2021, the demand for silver has surpassed its supply. This versatile metal serves as a valuable commodity and plays a crucial role in various industries including solar energy and automotive manufacturing. The wide range of applications for silver, from industrial uses to jewelry, digital photography, and investment, contributes to its high demand.
According to estimates by the Silver Institute, the overall industrial demand for silver has increased by over 55% due to its usage across industries like automotive, technology, pharmaceuticals, and solar energy. Its resistance to corrosion and beneficial thermal properties make it a popular choice for manufacturing and industrial fabrication.
Vishal Jain, CEO of Zerodha Fund House, highlighted the potential for silver to be a part of investment portfolios and modern industries. Silver ETFs offer a valuable means to diversify portfolios and leverage the unique characteristics of the metal.
As investors seek diversification and exposure to commodities, silver ETFs present a simple and hassle-free way to gain exposure to this precious metal. The increasing AUM of silver ETFs reflects the growing interest and recognition of silver as a valuable asset class.
