Silver rallied 98% in the last one year, but investors earned only 18%: What explains the huge return gap?

Silver has delivered a stunning rally over the past year. But the returns investors actually earned tell a very different story.

The September 2026 report of DSP Mutual Fund titled “NETRA - Early Signals Through Charts” mentioned that silver gained 98% over the last one year, while the average investor earned only 18% on a money-weighted basis.

Even more striking, 56% of the money invested in silver over the past 12 months is currently sitting at a loss.

What do the investor returns figures actually mean?

The 18% investor return is a money-weighted return based on monthly silver ETF net flows from August 2025 to July 2026. It reflects both how much investors invested and when they invested.

So, when larger amounts of money enter after a sharp rise in silver prices, those late investments have a greater impact on the return investors actually made.

The 56% figure provides another perspective on the timing issue. It represents the share of money invested in silver ETFs during the last 12 months whose holding-period return was negative as of 31 July 2026.

In other words, more than half of the money invested during this period was worth less than the amount invested.

This shows why silver’s 98% price gain over the last one year did not translate into similar investor returns.

What does FOMO have to do with it?

FOMO (fear of missing out) is not about buying the wrong asset. “The bigger risk is that FOMO makes them buy the right asset after most of the return has already happened,” the report noted.

When investors see an asset delivering spectacular returns, past performance can create expectations that the rally will continue.

This often changes investor behaviour. Instead of buying when valuations or prices are relatively lower, investors start committing more money as prices rise. In silver’s case, the flow data provides a striking example.

What do silver ETF inflows reveal about investor returns?

Silver ETF inflows accelerated as silver prices moved higher.

The biggest example came in January 2026, when silver ETFs attracted ₹11,761 crore in a single month, the largest monthly inflow on record. But that record inflow arrived around the monthly price peak.

The inflows in January were roughly equal to the total inflows silver ETFs received over the entire 12-month period from September 2024 to August 2025, when silver prices were still below ₹1.41 lakh.

In other words, investors put substantially more money into silver after prices had already climbed sharply.

“Investor demand became strongly pro-cyclical: the higher silver went, the more money chased it,” the report added.

Does a rally always mean strong investor returns?

Not necessarily. There is an important difference between the return generated by an asset and the return earned by investors in that asset.

If a large portion of the money enters near a price peak, subsequent gains may not benefit those investors equally. If prices then fall, recent investors can see losses even though the asset’s longer-period return remains impressive.

That is why the silver example offers a broader lesson for investors. “FOMO converts past returns into future expectations. Unfortunately, the price you pay determines the return you get,” the report mentioned.

Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.