Exchange-traded funds (ETFs) are investment avenues that invest the pooled fund in various asset categories like commodities, stocks, bonds, etc. Silver ETFs invest their funds in physical silver or silver-related instruments. The NAV of silver ETFs is directly dependent on the price of silver.
How Does a Silver ETF Work?
Silver ETFs track the spot price of silver in the open markets. Fluctuations in the price of silver will change the NAV of these ETFs. Fund managers of a silver ETF purchase silver and store them in secure vaults. SEBI safeguards the rights of the investors by regulating these ETFs.
The fund managers must obtain auditor reports on physical verification of the silver stored in vaults at regular intervals.
Features of Silver ETFs
Here are some features of Silver ETFs:
· Purity
Investors who allocate their funds to silver exchange-traded funds need not worry about the purity of the metal. The physical silver bought by fund managers is at least 99.99% pure and is stored in secure vaults.
· Acts as a Hedge against Inflation
Investing in commodities like gold and silver can hedge against inflation. Accordingly, during a crisis, silver can be a prudent investment option.
· No Storage Costs
Silver-based ETFs allow investors to avoid paying storage costs. Fund managers purchase silver by utilising the investment corpus. The storage and security are also a fund house’s responsibility.
· Reduced Portfolio Risk
Individuals can diversify their portfolios by investing in low-risk assets like silver, gold, etc. This will reduce the overall risk exposure in their investment portfolio.
For more information and personalized advice, please contact Wealth Max. Our team of experts is ready to assist you with your financial planning needs. Reach out to us today to take the next step towards achieving your financial goals.
Email-ID – wealthmaxxdata@gmail.com
Contact no. – +91 98204 65838
