In the Mutual fund, investors can now look at investing in silver exchange-traded funds instead of buying physical silver and where the precious metal is the underlying asset.
Move to enhance participation in the bullion market also the Securities, Exchange Board of India had allowed the launch of silver exchange-traded funds in November 2021.
Three mutual fund houses have introduced silver exchange-traded funds in January 2022 also others are in the process.
Silver prices have dropped. A sharp uptick in prices amid elevated inflation and increased industrial demand cannot be ruled out in the coming years it is the explanation in this side of analysts.
The compound annual growth rate for the preceding three years was also seen at 18% due to the pandemic-driven buying and experts highlighted.
Speaking to FE and ICICI Prudential AMC, explained that Silver price history shows that during times of rising inflation and there can be an uptick in price.
Also, a precious commodity that silver has delivered during times of crisis. In each of the past three periods of crisis-affected global financial markets and silver has outperformed equity as an asset class.
White metal tends to act as a hedge against inflation, remains a tactical allocation, unlike gold which is a strategic allocation and maintained by analysts.
In the last three-five years that the white metal has delivered returns of 60%. It remains comparatively volatile than gold.
Senior analyst HDFC Securities explained that Silver prices in India have given absolute returns of 62% last five years.
Silver is a quite volatile commodity compared to gold that various opportunities for traders to capture short-term returns considering fundamental shifts.
Despite some headwinds in the near to medium term due to the tightening of monetary policy by major central banks and analysts expect silver exchange-traded funds to be a better opportunity as it is likely to deliver higher returns than gold.
Scale Rs 90,000 in the Indian markets over the coming years. The demand for green technologies, strong economic recovery will increase silver usage in industries.
Expect silver to give 40% returns in the next five years prices are expected to touch Rs 90,000 per kg in the Indian market.
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