Aditya Birla Sun Life MF to launch silver ETF and FOF next week

The new fund offer for Aditya Birla Sun Life Silver ETF and Aditya Birla Sun Life Silver ETF Fund of Fund will open for subscription on 13 January and close on 27 January.

The fund managers of the scheme would be Lovelish Solanki and Kedarnath Mirajkar.

The investment objective of the scheme is to generate returns that are in line with the performance of physical silver in domestic prices, subject to tracking error.

As per the fund house, each unit of the fund will be approximately equal to 1 gram of silver and during the NFO period, the units can be bought directly through the mutual fund.

Since it is an open-ended fund, the units can be bought or sold directly on the exchange even after the subscription period.

While there be no exit load on Aditya Birla Sun Life Silver ETF, there will be an exit load of 0.5% on redemptions or switching-out of units on or before 30 days from the date of allotment, and nil thereafter.

Mutual funds have been gearing up to launch schemes based on silver after Sebi in November had allowed investments based on silver in the Indian market.

ICICI Prudential Asset Management Company Ltd on Wednesday launched the country’s first silver exchange-traded fund (ETF).

Another fund house, Nippon India Mutual Fund (NIMF) will launch its silver FOF and silver ETF on 13 January.

As per the product presentation, the demand and supply of silver continue to remain mismatched. “Demand rising by 15% per annum while supply is rising only 8% per annum. Household demand is back to pre-pandemic levels, while industrial demand from new industries like energy (solar) and automotive (EVs & batteries) is increasing at a rapid pace as governments around the world remain committed to Paris Accord & COP26,” the fund house said.

“Silver has consolidated and lagged gold and equities for over a year now. It is well poised for a breakout and has fundamental reasons for multi-year growth as stated above,” the company added.