Nippon India, Mirae Asset and ABSL have taken the lead in launching silver ETFs. On Friday, the three fund houses filed papers with SEBI to launch the first set of ETFs in the newly introduced fund category.
Nippon India has filed papers for two schemes in the category — one ETF and one ETF fund of fund. Mirae Asset and ABSL have applied only for silver ETFs.
In their draft documents, the fund houses said the objective will be to generate returns that are in line with the performance of physical silver.
With the launch of silver ETFs, mutual fund investors will have an added option in the commodity segment. Till now, gold ETF is the only investment option in this space.
SEBI opened the doors for launch of silver ETFs with the listing of norms last week. Through a circular issued on November 24, SEBI has mandated silver ETFs to invest at least 95% of the net assets in silver and silver-related instruments. The regulator has also set the maximum allowed tracking error at 2%.
The regulator said fund houses could invest up to 10% in Exchange Traded Commodity Derivatives (ETCDs) having silver as underlying asset. However, the 10% limit will not be applicable if the scheme invests in the instrument with the intention to take delivery.
Further, AMCs will have to disclose the NAV of silver ETFs daily on their website. They also have to publish indicative NAVs on stock exchange platforms.
The ETFs will be benchmarked against the price of silver, SEBI said in the circular.
