Mumbai: Silver Exchange-Traded Funds (ETFs) have gained massive investor interest over the past three years, with their assets under management (AUM) crossing Rs 13,500 crore as of January 2025, according to a report on Saturday.
Currently, there are 12 Silver ETFs in the Indian market, with more than six lakh investor folios, the data compiled by Zerodha Fund House showed. The ETFs of the precious metal have witnessed significant growth in India since the Securities and Exchange Board of India (SEBI) allowed asset management companies to launch them in November 2021.
“The increasing transaction volumes of silver ETFs are a clear indication of growing investor interest,” Zerodha Fund House CBO Vaibhav Jalan said. He added that these ETFs offer an alternative to physical silver ownership, addressing concerns about storage, security, and insurance while providing access to silver’s price movements.
This surge in interest reflects the growing demand for silver as an investment option. Investors are increasingly looking for ways to diversify their portfolios, and Silver ETFs offer a convenient and hassle-free way to gain exposure to this precious metal. The demand for silver has consistently outpaced its supply since 2021. This versatile metal is not only a valuable commodity but also plays a crucial role in various industries.
It is widely used in solar energy, automotive manufacturing, digital photography, and jewellery. Additionally, silver’s excellent thermal properties and resistance to corrosion make it a preferred material in industrial manufacturing and fabrication. According to estimates by The Silver Institute, the global industrial demand for silver has risen by more than 55 per cent. This growth is driven by its increasing applications in sectors such as automotive, technology, pharmaceuticals, and solar energy.
As industries continue to rely on silver, its investment appeal has also strengthened, the report said. “Silver has the potential to play a role in both investment portfolios and modern industries,” Zerodha Fund House CEO Vishal Jain said. He added that the silver ETFs are a valuable tool to diversify one’s portfolios and capitalise on the metal’s unique characteristics.