The Fund of Fund will primarily invest in DSP Silver ETF units, providing returns that closely mirror the performance of physical silver in domestic markets.
Silver plays a key role in industries such as electronics, automotive, power, and jewelry. As the global shift towards renewable energy continues, demand for silver is expected to increase, while its supply remains limited. 2025 may see the fifth consecutive year of a supply deficit in silver, potentially exceeding 20% of annual demand.
This supply imbalance has historically led to price increases when investment demand rises.
Additionally, silver, priced in dollar, could offer Indian investors an advantage if the rupee weakens, as silver prices in rupee have outperformed those in dollar in the past.
The DSP Silver ETF Fund of Fund allows investors to hold silver in a digital format, without the need for a demat account.
The scheme also offers the option to invest through SIPs and redeem units without any lock-in period.
“Precious metals like silver are considered a safe haven during times of uncertainty. With a growing industrial demand for silver in sectors like electric vehicles, solar panels, and 5G networks, silver’s value may increase. However, short-term fluctuations in prices should be expected,” said Anil Ghelani, CFA, Head of Passive Investments & Products at DSP Mutual Fund.
The launch of this Fund of Fund aims to simplify access to silver for investors, providing a liquid and cost-effective investment option in the commodity market.