Axis MF launches silver ETF and fund of fund

NEW DELHI: Axis Mutual Fund has announced the launch of a silver exchange-traded fund (ETF) and fund of fund (FoF), open-ended schemes replicating or tracking domestic price of precious metal.

Both the funds would be benchmarked against the London Bullion Market Association (LBMA) silver daily spot AM fixing price. The new fund offers for both the schemes opened for subscription on 2 September and will close on 15 September.

Pratik Tibrewal, fund manager, commodities, will be managing the Axis Silver ETF and the minimum application amount would be 500 per application and in the multiples of Re. 1, thereafter.

Aditya Pagaria, fund manager, fixed income will be managing the Axis Silver FoF.

According to the fund house, investing in silver in its physical form may pose challenges with respect to corrosion over time, safety, purity of the metal, liquidity risk etc. “Investors can opt to gain exposure to the precious metal via an ETF that aims to generate returns in line with the performance of physical silver in domestic prices, subject to tracing error. Investors who do not have a demat account can gain exposure by investing in Silver FoF,” it said in a release.

Silver has widespread usage across multiple sectors, thereby creating a unique opportunity for investors, the fund house believes.

The metal has gained increased acceptance in industries such as bio pharma and medical technologies, power generation and clean energy, and electric vehicles and mobility technologies.

Furthermore, silver also has the potential to provide a hedge against inflation.

Both the funds will invest in industry standard 30 kg physical silver bullion of 999 parts per 1000 fineness. Further, storage, transport and insurance hassles of silver would be taken care by Axis AMC.

Chandresh Nigam, managing director and chief executive officer, Axis AMC, said, “Silver’s interesting proposition wherein it has the ability to act as an industrial commodity as well as a precious metal is one of the key factors that we believe will drive its significance. Now that investors have access to investing in Silver via ETFs, it will further increase the metal’s value as a promising asset class in the future.”

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