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NEW DELHI: HDFC Asset Management Company Ltd. has launched a silver exchange-traded fund (ETF), an open-ended scheme that will replicate or track the performance of the precious metal. The new fund offer (NFO) for HDFC Silver ETF opened for subscription on 18 August and will close on 26 August.

The fund manager to the scheme is Bhagyesh Kagalkar.

According to the fund house, investing in physical silver and storing it in a safe manner could be difficult for an individual, but HDFC Silver ETF provides investors an opportunity to digitally invest in and own silver which is easily tradable during market hours, replicates/tracks the performance of the metal, and diversifies a portfolio at a low cost.

Commenting on the launch, Navneet Munot, managing director and chief executive officer, HDFC Asset Management Co. Ltd, said, “HDFC AMC has always maintained an investor-first approach offering our clients with the most effective solutions while launching products. This fund will provide investors an opportunity to enhance portfolio diversification by investing in a metal with a differentiated risk-return profile."

Silver can be considered an investment vehicle because of its twin facets as an industrial commodity and as a precious metal.

The commodity has multi-purpose utility in industrial activities such as portable devices, industrial equipment, electric vehicles, mobility, energy production and telecom.

As per the fund house, silver demand outlook is robust on account of higher adoption in new age and green technologies. It is also a precious metal and thus can be used as a hedge against currency depreciation since it is globally priced.

The minimum investment amount during the NFO period would be 500, and in multiples of Re 1, thereafter. There will be nil exit load on redemption of units.

The Securities and Exchange Board of India (Sebi) had in September allowed mutual fund houses to introduce silver ETFs in the Indian market.

There are three ETFs currently available in the market that focus on silver. The biggest scheme in terms of assets, ICICI Prudential Silver ETF ( 488 crore), has delivered 10% returns since its inception in January.

According to experts, silver has a huge industrial usage, because of which this precious metal tends to be volatile.

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