An interesting trend has been seen in the world of investment in the last one year. While traditionally gold has been considered a safe haven for investors, this time silver ETFs have given it tough competition. The silver ETF category has given an average return of 47% in the last 1 year, while the average return of the gold ETF category has been slightly better at 47.84%.
That means overall, gold and silver ETFs are almost neck and neck, with gold having a slight edge. Among the best-performing funds, the trend is similar too.
Best gold ETF and silver ETF
UTI Gold ETF has delivered nearly 49% returns, just ahead of Aditya Birla Sun Life Silver ETF, which returned 48%.
Overall, this shows that at the top level, gold ETFs and silver ETFs both have seen almost equal gains over the last one year. But what about the rise in prices of these two precious metals.
What is silver ETF?
Silver ETF (Exchange Traded Fund) is an investment option in which investors can take advantage of the fluctuations in the prices of silver without buying it.
These work like mutual funds and are listed on the stock exchange.
Their price directly depends on the international spot price and exchange rate of silver.
Along with this, factors like management fees and tracking error also affect it.
How does a gold ETF work?
Gold ETF also works in a similar way, only the underlying asset in it is gold.
The value of their units is linked to the gold price.
The advantage of this is that investors can invest without buying gold jewellery or physical gold.
There is no worry of storage or security and it can be bought and sold anytime like shares.
Silver far ahead in metal prices
Not only ETFs, but silver has also beaten gold in comparison to metal prices.
In the last one year, the price of silver has climbed more than 54% and it is currently trading around Rs 1.28 lakh per kg.
At the same time, gold has given a return of about 48% and its price is running above Rs 1.08 lakh per 10 grams.
It is clear from this that in the recent trend, the ‘white metal’ is benefiting investors more.
Should one invest in silver now?
The question is, should investors step into silver ETF now?
Advantage: Due to recent returns and industrial demand (in industries like electric vehicles, solar panels), silver can be considered a better option for the long term.
Risk: Silver prices are more volatile than gold. That is, there is more volatility in it, which can also cause losses to short-term investors.
Message for investors
If you want to invest for the long term and have the ability to take risks, then silver ETF can be a good addition to the portfolio.
At the same time, safe and stable investors can still prefer gold ETF.
Overall, this time silver has shown more shine than gold. But the decision to invest always depends on your financial goal, risk capacity and time period.