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Silver ETF, how to Invest in Silver fund of funds and Silver ETFs

 How you can invest in Silver ETFs, Funds and Fund ETFs

Gold and silver have been used for jewellery in India since ancient times. One was also called the gold bird because the people of India did not have gold and silver ornaments. We must have heard from our elders that kings in India used to give gold and silver jewellery to the poor people to help them. With the passage of time, there have been many changes in India too and in today's time gold and silver are being used for investment apart from jewellery. People in India have been investing in gold and silver for the last few years and one of the reasons for this is that people consider investing in gold and silver as safe and their prices are directly related to inflation. According to our research, if inflation rises, then along with it the prices of gold and silver also increase and investors get the benefit of this. In today's time, many options have been opened to invest in gold such as Gold ETF, Sovereign Gold Bond Scheme, and Gold Mutual Fund etc. But till now there were limited options available for investment in silver such as silver jewellery and coins etc.



But ever since SEBI has given green signal to more investment avenues in silver, since then the attention of investors has become more focused on silver ETFs and options like funds and funds, let us now understand the benefits taken in silver.

What are the benefits of investing in silver?

Silver is also used in industrial areas such as solar panels, medical instruments, renewable energy, switches, and satellites, etc. If the demand for silver in the industry remains the same in the coming times, then investors can make profits. Silver is a good conductor of electricity. If we compare silver to copper, silver is an expensive metal, but silver is used in special industrial electrical products where possible according to the cost.

What is the correlation of Silver with Equity market?

1) Silver's reciprocal relationship with equity is not considered good. If we check the past records, it has been seen that whenever there is a time of recession in the stock market, at that time silver has seen an uptrend. Therefore, every investor must also invest in silver in the investment portfolio according to the diversification that if there is a deep mutual relationship between two assets, then both can see a rise or fall at the same time, and the stock market and silver can be seen together. In between is not necessary.

2) If we check the record in the past, the demand for silver is high in an environment of uncertainty, one of the reasons for this is that silver is seen as a safe investment. When there was a global recession in 2008-2009, between January 1, 2008 and February 27, 2009, the Nifty-50 index had recorded a loss of 54%, while Silver had registered a gain of 13%. So we can say that investing in silver along with other things will give the benefit of portfolio diversification.

3) Historically it has been observed that whenever inflation is high, the price of silver is also high, hence silver becomes an attractive investment option.

4) If we calculate the data for the last almost a decade, we will find that there is a huge demand for silver in the industry. Although past performance does not guarantee that the same performance will be seen in future as well? This cannot be guaranteed, but you also need to keep in mind that silver has registered a net profit of about 73% in the last three years.

 What are the options for investing in silver?

 ETF Fund of Funds and Silver ETF

If you want to invest in silver then the facility of ETF fund of fund is available. Silver ETFs invest investors' money in silver. On the other hand, Silver ETF Fund of Fund invests in Silver ETF, so if seen, both Silver Fund of Fund and Silver ETF invest in Silver in the end. Let us tell you that you need a demat account to invest in ETFs, while on the other hand, you can invest in Fund of Funds without a demat account. One objective of Silver ETF and Fund of Fund is that by investing in it, investors can get profits similar to the profits they get from investing in pure silver in the domestic market.

This also gives another advantage to the investors that they can be easily sold when needed and the cost of their maintenance is also reduced. You also need to know that investors can also invest in Silver ETF Fund of Funds through SIP.

Can I get tax exemption by investing in Silver ETFs?

If spoken in clear words, there is no direct income tax exemption on investing in Silver ETFs, but let us tell you that if an investor sells it after being invested in it for more than three years, then what will happen on this? The profit will be there, it will get the benefit of indexation and due to this the tax on profits is reduced.

Which companies are offering Silver ETF & ETF Fund of Funds ?

Let us tell the viewers of our website that ICICI Prudential Mutual Fund had launched Silver ETF after getting permission from market regulator SEBI and now planning to launch Fund of Fund along with it. Apart from ICICI Prudential Mutual Fund, Nippon India and Birla Mutual Fund are also going to launch Silver ETF from January 13. Another advantage, let your website viewers know that investors can start investing with a minimum of Rs 100 and both of them are open ended schemes, that is, even after the closure of NFO, they can be invested at market rates. According to us, in the coming time, more mutual fund companies may enter the Indian market by taking Silver ETF.

In nutshell, we can say that Investors should invest in Silver ETF as well as in Equity market to balance their investment portfolios because It may give good balance to your portfolio in the future.

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