Page 19 - Bullion World Volume 3 Issue 4 April 2023

Bullion World | Volume 3 | Issue 4 | April 2023

Silver ETFs in India - The Silver Lining

Mr Vikram Dhawan, Head Commodities & Fund Manager, Nippon India Mutual Fund

India consumed around USD 8 ETF Trust. The Custodians, usually
Billion worth of Silver in 2022, around large institutions, are also regulated
65,000 Crores in rupee terms. In by SEBI.
India, Silver jewellery, silverware,
etc., account for around 50% of the Silver & Gold ETFs listed in India
consumption, whereas investments are unique in the world because
account for about 15%, and the rest both the Fund House, as well as the
is consumed for industrial purposes. Custodians, are directly regulated
by the market regulator, SEBI. The
However, the industrial consumption bullion markets in India also come
of Silver is expected to grow both under the purview of the Reserve
globally and locally on account of a Bank of India. This ensures high
surge in demand from the Solar, 5G, safety for the investors.
Greentech, and EV industries.
Since ETFs are listed on the Mr Vikram Dhawan
Unlike Gold, Silver which is over Exchanges and cater to Investors
80 times bulkier than Gold, it is not and Authorized Participants across
feasible to hold it in the physical form geographical locations, the physical retail investors, traders, and
beyond small quantities for investors. Silver underlying the ETFs may be hedgers, who are large buyers of
stored in various locations. The physical Silver, by increasing the
Silver is significantly less valuable Custodian is responsible for safe efficiency of their dealings.
than Gold and prone to superficial keeping of physical Silver at each
oxidation. It is thus relatively location. Investors can buy Silver ETF units
cumbersome to invest in physical at the National Stock Exchange
form in larger quantities. Moreover, Physical Silver held under ETF is through their brokers. Alternatively,
the secondary market for physical vaulted with reputed vaulting agents investors can also approach Fund
Silver is often fraught with wide and secured through insurance. Houses directly and subscribe to
spreads. Investing in Silver through Inspections of the silver bars are Silver Gold Savings Fund which also
Silver ETFs eliminates the aforesaid done periodically. offers a Systematic Investment Plan
challenges. (SIP).
The benchmark for Silver ETFs is the
Salient Features LBMA Silver Price. London Bullion Nippon India Mutual Fund is the
Silver ETFs have become the Market (LBMA) Good Delivery Bars pioneer and leader in Precious
preferred instrument for global are almost a universal norm. Metals ETFs. Our Gold and Silver
investors to participate in the silver ETFs are amongst the most liquid in
market. Like Gold, the liquidity in Silver ETFs will be positive for India’s the category.
Silver ETFs is superior to that of the macros like current account deficit
underlying physical market. as part or entire AUM shall add to
the circulation of liquid Silver in the
As per the Securities & Exchange domestic market, unlike physical
Board of India (SEBI) regulations, the Silver that goes out of circulation
underlying for Silver ETFs shall be once sold to consumers.
London Bullion Market Association
(LBMA) good delivery silver bars. The financialization of the silver
The assets of the Silver ETFs are market in India shall eventually
held by a Custodian on behalf of the benefit the country as it will benefit

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