DSP MF launches Silver ETF FoF ahead of Akshaya Tritiya; is silver a better buy than gold this year?

DSP Mutual Fund has unveiled its latest financial product, the DSP Silver ETF Fund of Fund, designed to provide investors with a structured opportunity to invest in silver. This fund primarily invests in DSP Silver ETF units, aiming to deliver returns that closely track the true performance of silver in the domestic market.

This launch comes at a time when silver's demand is expanding, driven by its applications in diverse sectors including electronics, automotive, and renewable energy. The global shift towards sustainable energy has further bolstered silver's industrial demand, even as supply remains constrained, potentially leading to price hikes as investment demand rises. 

In the current market scenario, the significance of silver cannot be understated. As the world forges ahead with renewable energy initiatives, the demand for silver, a critical component in solar panels, electric vehicles, and 5G technology, is anticipated to grow.

Despite this, the global supply of silver is projected to face a deficit for the fifth consecutive year in 2025, potentially surpassing 20% of the annual demand. Such imbalances historically result in higher silver prices, particularly when investment interest peaks. Additionally, for Indian investors, silver priced in dollars can be advantageous if the rupee weakens, with past trends indicating that silver in rupees has outperformed its dollar-denominated counterpart. 

This new fund offers a convenient way for investors to hold silver digitally, eliminating the need for a demat account. The fund provides flexibility through options to invest via systematic investment plans (SIPs) and redeem units at any time without a lock-in period.

Anil Ghelani, CFA, Head of Passive Investments & Products at DSP Mutual Fund, stated, "Precious metals like silver are considered a safe haven during times of uncertainty. With a growing industrial demand for silver in sectors like electric vehicles, solar panels, and 5G networks, silver’s value may increase. However, short-term fluctuations in prices should be expected." This fund aims to simplify silver investment, making it a liquid and cost-effective choice in the commodity market.

Gold vs Silver

In the recent economic climate, gold has seen a significant price rally, both globally and in India, while silver prices have remained relatively muted. From the start of the year, gold prices surged by 25.1%, whereas silver increased by 13.5%, closing at Rs 97,442 per kg at the MCX spot market. Experts suggest that silver could potentially yield higher returns than gold in the forthcoming months as the latter's rally might pause. A key driver for silver's potential growth is the rising gold-to-silver ratio, which has surpassed 100, marking only the second instance since the Covid-19 crisis. A high ratio historically indicates that gold has outpaced silver, a trend that many analysts view as unsustainable in the long term. [4]

Given these dynamics, the introduction of the DSP Silver ETF Fund of Fund aligns with the strategic positioning of silver as a viable investment alternative. In contrast to the robust performance of gold, which may see a temporary halt in its upward momentum, silver offers a promising prospect for investors seeking to diversify their portfolios. 

What should you choose for Akshaya Tritiya

Gold has been on a stellar run in recent months, with prices surging both globally and in India. Since the start of 2025, gold has jumped 25.1%, far outpacing silver, which has risen by 13.5% over the same period. On Friday, silver closed at Rs 97,442 per kg in the MCX spot market.

However, analysts now believe silver could deliver stronger returns than gold in the months ahead. They feel For investors weighing the two metals, silver may offer a better risk-reward trade-off in the short to medium term — especially if the gold rally pauses and silver begins to close the performance gap.

One of the key reasons behind this optimism is the soaring gold-to-silver ratio, which has crossed the 100 mark — a rare occurrence last seen during the COVID-19 crash, when it peaked at 126. The ratio indicates how many ounces of silver are needed to buy one ounce of gold. A high ratio historically signals that silver is undervalued compared to gold, suggesting potential for a catch-up rally.

The World Silver Survey 2025 by the Silver Institute supports this view.

“A high gold-to-silver ratio should help silver, as some investors may view the white metal as undervalued. Also, expected US interest rate cuts, along with elevated economic and geopolitical uncertainties, should continue to fuel gold and silver investment,” the study noted.

That said, the report also warns that a slowing global economy may limit silver’s upside due to its extensive industrial applications, unlike gold which is largely seen as a safe-haven asset.

Naveen Mathur, Director – Commodities & Currencies at Anand Rathi Shares, noted: “Akshaya Tritiya is always considered auspicious in India when buying gold or silver. However, gold has risen almost 21%, while silver returns are around 11–12% year-to-date. Investing in silver with a long-term perspective of one year is likely a better option at current levels as compared to gold.”