India may soon have Silver ETFs; SEBI considers plan

India might soon see the roll out of silver-backed exchange-traded funds (ETFs). Securities and Exchange Board of India (SEBI) is considering a proposal to allow mutual funds to launch bespoke plans. The proposal was discussed in a recent meeting of the SEBI-appointed Mutual Fund Advisory Committee. The recommendations are likely to be accepted soon unless there are legal or operational hurdles.

There has been a lot of demand for Silver ETFs but there are fewer investment options that the SEBI and the industry want to address, said a person in the know to The Economic Times.

Silver ETFs has been a long-standing demand of the market participants. Many currently either buy the metal physically or use commodity derivative instruments to trade in silver. Some buy Silver ETFs that are listed overseas through broking platforms.

Moreover, purchasing physical silver is not that feasible as it is bulkier than gold and storage could be a challenge.

If this follows through, then investors will get one more option to enhance their asset allocation products.

GOLD ETFs

The current concept of Gold ETFs was developed in India in 2002 by Benchmark Asset Management Company Pvt Ltd in a proposal to SEBI. It was finally approved and launched in 2007. There’s currently a list of a dozen Gold ETFs, including SBI Gold ETF, Kotak Gold ETF, Birla Sun Life Gold ETF, HDFC Gold Exchange Traded Fund, Nippon Gold ETF, Axis Gold ETF, ICICI Prudential Gold ETF.

Also read: Gold imports jump multi-fold to $7.9 bn in Q1 of FY22