Kotak Mahindra AMC launches silver ETF. Details here

The new fund offering (NFO) will open for subscription on 21 November and close on 5 December, with no loads for investors.

The objective of the fund is to generate returns in line with the performance of physical silver in domestic prices, subject to tracking error, but Kotak Mahindra AMC added the caveat that there is no assurance or guarantee that the investment objective of the scheme will be achieved.

The fund may even participate in silver related instruments. Exchange Traded Commodity Derivatives (ETCDs) with silver as the underlying will be considered as silver related instrument for Silver ETFs.

“Investing in Silver ETFs is easier and safer than buying it in its physical form, providing easy liquidity and the flexibility to invest in smaller quantities. Furthermore, it offers lower transaction costs than physical silver while delivering the market equivalent price of the metal,” Kotak Mahindra AMC said in its statement.

The units of the fund will be in the form of creation unit size or in multiples thereof and each creation unit consists of 30,000 units of Kotak Silver ETF, as per the company. One unit is approximately equal to 1 gram of silver.

“Our Silver ETF launch is in line with our continued effort to provide easy and efficient access to various asset classes. It will provide convenient access to Silver as an asset which is not only a precious metal but also has many industrial uses. The consolidation in Silver prices since the start of the year provides a good opportunity for those looking to allocate some money to this asset for diversification,” said Nilesh Shah, Group President and Managing Director, Kotak Mahindra Asset Management Co. Ltd.

The World Silver Survey 2022 shows that post the pandemic demand for silver has outstripped supply due to uptick in industrial activity and a surge in retail investor appetite for the metal. The year 2021 recorded peak inflows into silver exchange traded products.