Page 22 - Bullion World Volume 3 Issue 11 November 2023

Bullion World | Volume 3 | Issue 11 | November 2023
B ullion W orld | V olume 3 | I ssue 11 | N o v ember 2023
Unlocking the Potential of Silver ETFs:

Benefits and SEBI Regulations

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

Investing in a silver ETF, or However, it's important to note that
exchange-traded fund, can offer investing in any asset carries risks,
several benefits. Here are a few key including the potential for loss of
advantages: principal. It's always advisable to do
thorough research, consider your
1. Diversification: Investing in a investment goals and risk tolerance,
silver ETF allows you to gain and consult with a financial advisor
exposure to the silver market before making any investment
without having to directly own decisions.
physical silver. This diversifies
your investment portfolio, Silver ETFs are structured as
reducing the risk associated with exchange-traded funds that aim to
holding only a few assets. track the price movements of silver.
2. Liquidity: ETFs are traded on Silver ETFs are physically backed,
stock exchanges, which means meaning they hold actual silver bullion Mr Vikram Dhawan
they offer high liquidity. You or equivalent in a secure vault. The
can easily buy or sell shares of ETF's value is directly linked to the The primary objective of SEBI's
a silver ETF at any time during price of silver. regulations is to protect the interests
market hours, providing flexibility of individual investors. By ensuring
and ease of access to your The ETF Trust issues shares that transparency, accountability, and
investment. represent ownership in the underlying fair practices, these regulations instil
3. Cost-effective: Compared to silver. These shares are traded on confidence and trust in the silver ETF
investing in physical silver, silver stock exchanges, allowing investors market. Investors can be assured
ETFs may generally have lower to buy or sell them throughout the that their investments are subject to a
impact costs. You don't have to trading day at market prices. regulatory framework that prioritizes
worry about storage, insurance, their well-being.
or other incidentals associated It's important to note that the
with holding physical silver as all specific structure and mechanics In conclusion, silver ETFs regulated
that is covered under the Silver of silver ETFs may vary slightly by SEBI offer a multitude of benefits
ETF. between different funds. It's to individual investors. With a focus
4. Transparency: ETFs provide always recommended to review on transparency, liquidity, and cost-
transparency in terms of their the prospectus and consult with a effectiveness, these regulations
holdings. You can easily access financial advisor to understand the create a secure and investor-
information about the underlying specific details of any particular silver friendly environment. Investors can
assets, such as the amount of ETF. confidently explore the potential
silver held by the fund, allowing of silver ETFs, knowing that their
for better informed investment SEBI, the regulatory authority interests are protected by a robust
decisions. overseeing India's securities regulatory framework.
5. Potential for returns: Silver has market, has implemented stringent
historically been considered regulations specifically tailored to the Nippon India Silver ETF is an
a store of value and a hedge silver ETF space. These regulations exchange-traded fund that aims
against inflation. Investing in a serve as a safeguard, providing a to provide returns that closely
silver ETF gives you exposure to secure investment environment correspond to the performance of
the potential price appreciation for individuals seeking to diversify the domestic silver spot price. It is
of silver. their portfolios and capitalize on the managed by Nippon India Mutual
potential of silver. Fund and is listed on the National
Stock Exchange (NSE) of India.

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