The ICICI Prudential MF Silver ETF will open for subscription on 5 January
Asset management firm ICICI Prudential Mutual Fund has announced the launch of the country’s first silver ETF that will invest in physical silver and money-related instruments.
The new fund offering (NFO) will open for subscription on Jan.5 and end on Jan.19, according to documents.
Additionally, a group of asset management companies are awaiting the launch of their silver ETFs and have filed documents with market regulator Sebi for approval in this regard.
HDFC Mutual Fund, Nippon India Mutual Fund, Mirae Asset Investment Managers, Aditya Birla Sun Life Asset Management Company, and DSP Mutual Fund are among the fund companies that have applied for cash ETFs.
It comes after Sebi released operating standards for the introduction of silver ETFs in November. Under the rules, these ETFs must invest at least 95 percent of their net assets in money and money-related instruments.
The ICICI Prudential Silver ETF is an open-ended program that will track national silver prices. The program will invest its proceeds in physical money and money-related instruments.
The investment objective of the program is to generate returns in line with the performance of physical silver at national prices as derived from the AM fixing prices of the LBMA (London Bullion Market Association).
Unlike holding physical silver, the fund company said that an investor can benefit from investing in silver ETFs because it offers more liquidity and less storage costs.
“We believe the Silver ETF will be one of the preferred ways for investors to gain exposure to silver, as there is no need to worry about the bulky nature of money, the purity, quality or liquidity of the investment, “Chintan Haria, head of products and strategy, at ICICI Prudential Mutual Fund, said.
He added that silver is among the preferred options globally when it comes to investing in precious metals. Indeed, money is considered as a store of value, a hedge against inflation and has a very limited correlation with other asset classes.
On Thursday, DSP Mutual Fund filed with Sebi the draft program information document for DSP Silver ETF, an open-end exchange-traded fund replicating the monitoring of national precious metal prices.