Since the Securities and Exchange Board of India (SEBI) permitted the launch of silver Exchange-Traded Funds (ETFs) in November 2021, these funds have witnessed remarkable growth. By January 2025, the total Assets Under Management (AUM) for silver ETFs surpassed Rs 13,500 crore, with over six lakh investor folios. As of that date, there are 12 silver ETFs collectively holding over 600,000 investor accounts, according to Zerodha Fund House.
Regarding the historical transaction volumes of silver ETFs, Vaibhav Jalan, Chief Business Officer of Zerodha Fund House, remarked, “The rising transaction volumes of silver ETFs clearly reflect an increasing interest among investors. These ETFs provide an alternative to owning physical silver, alleviating concerns related to storage, security, and insurance, while also allowing investors to benefit from fluctuations in silver prices.”
Silver Demand has Far Surpassed the Supply
The demand for silver has significantly exceeded its supply since 2021. This adaptable metal is not only a valuable commodity but also an essential element in various sectors, such as solar energy and automotive production. The demand for silver is further driven by its wide-ranging applications, which include industrial uses, jewelry, digital photography, and investment.
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Industrial Demand for Silver has Increased by More than 55%
According to the estimates by ‘The Silver Institute’, the overall industrial demand for silver has increased by more than 55% driven by its applications across various industries, including automotive, technology, pharmaceuticals, and solar energy. Silver is also used in manufacturing and industrial fabrication since it does not corrode and has good thermal properties.
Vishal Jain, CEO of Zerodha Fund House, said, “Silver has the potential to play a role in both investment portfolios and modern industries. Silver ETFs are a valuable tool to diversify one’s portfolios and capitalize on the metal’s unique characteristics.”
In a three-year period, from (Jan 2022- Jan 2025), the AUM of Silver ETFs have crossed Rs 13,500 cr. Also, as of Jan 2025, with over 6 lakh investor folios, it’s clear that Indian investors are taking exposure to silver. As investors seek diversification and exposure to commodities, Silver ETFs provide a simple and hassle-free way to take exposure to this precious metal.
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