Nippon India Mutual Fund launches silver ETF, FOF

Nippon India Mutual Fund (NIMF), on Wednesday, announced the launch of Nippon India Silver ETF, investing in physical silver and silver-related instruments.

It also announced the launch of Nippon India Silver ETF Fund of Fund (FOF) which will invest in units of Nippon India Silver ETF.

"With the First Silver FoF in the Industry, investors can participate without the need to have a demat account and can also opt for systematic investment plans (SIPs)," NAM India said.


New fund offers (NFO) of both the schemes will open on 13 January and close on 27 January.

The minimum investment amount required during the NFO of Nippon India Silver ETF is Rs 1,000 and in multiples of Rs 1 thereafter; for Nippon India Silver ETF Fund of Fund, the minimum investment amount required during NFO is Rs 100 and in multiples of Rs 1 thereafter.

The ETF would invest in physical silver and silver-related instruments and the performance of the scheme shall be benchmarked against the domestic price of silver (based on LBMA Silver daily spot-fixing price). Physical silver will be of 99.9 percent purity (999 parts per thousand) conforming to London Bullion Market Association (LBMA) Good Delivery Standards, NAM India said.

"The investment objective of Nippon India Silver ETF is to generate returns that are in line with the performance of physical silver in domestic prices, before expenses, subject to tracking errors. Whereas, the investment objective of Nippon India Silver ETF Fund of Fund (FOF) is to seek to provide returns that closely correspond to returns provided by Nippon India Silver ETF by investing in units of Nippon India Silver ETF. However, there can be no assurance or guarantee that the investment objective of the Schemes will be achieved," NAM India said in a media release.

"Historically, silver has a relatively low correlation to Indian equity indices and hence, silver ETF and silver ETF FOF will provide an opportunity to investors to diversify their portfolio as part of their asset allocation," said Hemen Bhatia, Head ETF, Nippon India Mutual Fund.

Aditya Birla Sun Life AMC also launched their silver ETF and FOF. The NFO for that also opens on January 13 and closes on January 27.