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DSP Mutual Fund announced the launch of DSP Silver ETF (exchange-traded fund), which will invest in silver and silver-related instruments. The new fund offer (NFO) for the ETF opened for subscription on 1 August and will close on 12 August.

“Demand for silver is higher than the supply and is mainly driven by industrial, investment and jewellery. Supply (at 997 million ounces) of silver depends on limited mine production capacities, but demand (at 1049 million ounces) may potentially increase further due to its application in new age tech, among many other use cases like photovoltaic cells (solar) and as the main electrical connector material in battery packs and control modules of electric vehicles," as per the fund house.

Also, silver in ETF format allows investors the flexibility to spend small amounts of money for purchases and that too at a relatively lower cost than most equity-oriented actively managed mutual funds, the fund house added. However, investing in silver is a high-risk strategy and is more suited for experienced investors who understand precious metals or commodities cycles. Investors must be prepared to face short-term fluctuations and stay resilient through such times.

“Investing in silver via an ETF is a modern and smart way for investors to gain exposure to this precious metal in an easy, digital form. Increasing demand for silver in industries, newer technologies and a shift to renewable sources of energy and the safe-haven demand can also act as favourable tailwinds for the metal. However, investors should expect fluctuations in short-term returns, especially during times of market volatility. An investment in DSP Silver ETF is suitable for investors looking to diversify, or for experienced investors or those with access to expert financial advice," said Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Investment Managers.

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