HDFC Mutual Fund launched a silver ETF fund of fund on October 7, which will remain open till October 21. The fund scheme seeks investment from investors who want capital appreciation by investing in units of HDFC Silver ETF.
The investment universe of fund scheme is units of HDFC Silver ETF (between 95 to 100 percent) and debt and money market instruments ( up to 5 percent).
The scheme will endeavour to track the performance of silver and will buy & sell ETF units either directly with the fund or through the secondary market.
The scheme's fund manager is Krishan Kumar Daga. The fund scheme offers regular and direct plan, while each plan offers growth option only.
For saving cost
It is often said that investing in physical silver and storing it safely adds additional cost for investors. Silver fund, therefore, offers an opportunity to investors to get exposure to silver through mutual fund.
“The HDFC Silver ETF FOF will provide investors the opportunity to invest in silver which serves dual utilities of being a precious metal and an industrial commodity,” said Navneet Munot, managing director and CEO of HDFC Asset Management.
There are numerous benefits of investing in silver ETFs. Retail investors can opt for smart investment options such as SIP (systematic investment plan) and STP (systematic transfer plan). The investment objective of this fund scheme is to seek appreciation of capital by investing in units of HDFC Silver ETF.
One can invest in silver in an easy and convenient way and in small amounts. This is also seen as a cost-effective way to invest in silver.
Investors can look forward to a hedge against currency risk. It can also be seen as an opportunity to leverage on the greater adoption of silver for new age technologies -- solar power, electric vehicles and others.
The increasing share of electric vehicles in the auto market is expected to increase demand of silver as EVs use almost twice the silver used in the traditional internal combustion engine (ICE) car, the fund house says in a statement.
It is important to mention here that the capital market regulator its approval to launch silver ETFs (exchange traded funds) in India in December 2021.