Silver Mutual Funds: These 4 schemes have given almost 30% returns in one year. Is it worth investing in Dhanteras?

Dhanteras 2024: Today is Dhanteras, the day when families traditionally buy gold, symbolizing prosperity, good luck and future security. Diwali, the festival that usheres in the new Hindu calendar year, is considered an auspicious time to invest in precious metals such as gold and silver.

During the Samvat 2080 close, both silver and gold ETFs performed well, outperforming the Nifty50 and BSE Sensex indices. This upward trend is expected to continue as Samvat 2080 draws to a close in the coming days.

ETFs, or exchange-traded funds, are investment vehicles that pool investors’ funds to invest in a variety of assets, including commodities, stocks and bonds. Silver ETFs in particular focus on investing in physical silver, silver futures contracts, or silver mining stocks.

According to ACE MF, silver mutual funds have posted impressive returns in 2024 with an average return of 28.51% across the category. Gold ETFs, silver ETFs, Nifty and Sensex have seen record gains this year, reaching 30%, 28%, 27% and 25% respectively.

Best Silver Mutual Funds

HDFC Silver ETF leads the silver fund category with an impressive 31.54% return in 2024 and assets under management (AUM) of Rs 320 crore as on September 30, 2024.

The Aditya Birla Sun Life Silver ETF and ICICI Prudential Silver ETF gave impressive returns of 29.08% and 29.05% respectively in the same year.

Nippon India Silver ETF stands out as the largest silver ETF in terms of AUM, with assets of Rs 4,476 crore in September. Despite its significant size, the fund still managed to provide investors with a remarkable return of 28.79% in 2024, offering a balance of stability and growth potential.

The five funds, including HDFC Silver ETF FoF, ICICI Pru Silver ETF FOF, Nippon India Silver ETF FOF, UTI Silver ETF FoF, Aditya Birla SL Silver ETF FOF and Kotak Silver ETF FoF, have collectively returned around 27% per annum. to date.

Silver investments

Silver is subject to fluctuations due to a variety of economic, geopolitical and technological factors. Unlike gold, silver has wide industrial applications, especially in the fields of electronics, solar energy, semiconductors and medical devices. As technology advances, demand for silver in these sectors is expected to increase, potentially driving prices higher.

Silver ETFs are gaining popularity among investors. In FY2025 till September, silver ETF inflows reached Rs 4,993 crore, with Rs 1,664 crore inflows in August alone.

Sriram BKR, senior investment strategist at Geojit Financial Services, noted that flows in FY25 were 9.9 times higher than in FY24 for the same period. Additionally, silver ETF Folios is up 236% year over year as of September. Investors appear to be interested in silver ETFs as a way to diversify their portfolios or take advantage of short-term market moves. Some of the inflows could also come from people moving away from purchasing physical silver.

Recently, Vedanta Chairman Anil Agarwal shared his views on silver. He said silver has evolved from a traditional precious metal to a critical industrial resource thanks to new age technology.

“In India, prices have crossed Rs 1 lakh per kg! Demand has doubled compared to last year. The demand for silver is driven not only by its traditional uses, but also by huge industrial demand. It is now widely used in solar panels for renewable energy, electric vehicles, advanced healthcare, electronics and many other technologies,” Agarwal said.

For silver, Agarwal said the combination of preciousness and functionality is rare and the gap between supply and demand is widening. “This is the new critical mineral of the future,” he said.