123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

What Are The Features Of Silver Etfs?

Profile Picture
By Author: Anand Srinivasan
Total Articles: 9
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Like gold, silver is another popular commodity for Indian investors. However, many people find purchasing and selling physical silver difficult. There is also an added difficulty in storage and safety. Investing in Silver Exchange-Traded Funds can free you from all these hassles. ETFs are a collection of Bonds, Equities, and Commodities traded on an exchange. With ETFs, you can collectively invest in a large quantum of securities at affordable rates.

A Silver ETF is a financial instrument whose underlying asset is silver. It invests approximately 95% of its corpus in physical silver or assets like Exchange-Traded Commodity Derivatives. It also tracks the spot price of silver and delivers returns accordingly.

How does it work?


Demand and supply of silver throughout the trading day influence the Silver ETF price. Following the demand and supply principle, the prices will continue to rise if the demand for silver grows. Meanwhile, the costs will decline to zero if the demand exceeds the supply.

Features

Fund managers of silver ETFs purchase ...
... silver and store them in secure vaults. SEBI safeguards the rights by regulating them. The fund managers must obtain auditor reports on physical verification of the silver stored in vaults regularly. Here are the features:

Purity


Investors who invest in the best Silver ETF need not worry about the metal’s purity. Fund managers buy physical silver, which is at least 99.9% pure, and store it in secure vaults. You can invest in these by following the SIP or lumpsum investment method.

Hedge against inflation


Investing in gold and silver can hedge against inflation. You can use these investments during a crisis to compensate for declining purchasing power. Silver and cyclical equities, including energy stocks, may offer better returns for inflation-conscious investors. Investing in funds like the DSP Silver ETF can add precious metal exposure to your portfolio.

No storage costs


Silver-based ETFs need not require storage costs. Fund managers can purchase the asset by utilising the investment corpus. Their storage and security are also a fund house’s responsibility.

Reduced risk


To reduce the overall risk exposure, you can diversify your portfolio by investing in low-risk assets like silver, gold, etc. When you invest in Silver ETF, remember to pay the Long-Term Capital Gains Tax of 20% if you plan to hold it for more than 36 months. However, if the investor’s holding is for less than three years or 36 months, profits are treated as Short-Term Capital Gains and taxed per the respective tax slab.

Conclusion


A Silver ETF is an investment fund that tracks the price of silver and allows investors to invest in silver without owning it physically through the National Stock Exchange and Bombay Stock Exchange in India. Since it is more volatile than gold, consider your risk appetite before investing.

Total Views: 126Word Count: 446See All articles From Author

Add Comment

Investing / Finance Articles

1. Top 5 Loan Secrets For Women Entrepreneurs
Author: Mpower Credcure Team

2. Mastering Currency Trading: Strategies For Profitable Returns
Author: hoardingonrent

3. Unlock The Secrets Of Itin Application: Your Guide To Obtaining An Itin Number For Non-us Citizens
Author: itin.support

4. Simplify Your Itin Application Process And Save With Our New Year Discount
Author: itin.support

5. Paystand Named Winner Of Fintech Breakthrough Award For Defi Innovation
Author: Orson Amiri

6. How To Sell Usdt In Dubai: A Comprehensive Guide
Author: cryptodubaiotc

7. Navigating The European Crypto Landscape: A Guide To Buying Usdt In Europe
Author: cryptoeuropeotc

8. Exploring The Rise Of Usdt Otc In Dubai: A Hub For Crypto Investors
Author: cryptodubaiotc

9. Explorez En Toute Sérénité Avec Un Guide Compétent : Voyage Privé En Inde
Author: Voyage en Inde en 2024

10. Mastering The Art Of Profitable Trading: Strategies And Tips
Author: hoardingonrent

11. Take Profit Order - A Quick Review And How It Works?
Author: Growlonix

12. Federal Interest Rate And Forex Market
Author: Shyamkumar

13. How Does A Loan Against Mutual Funds Help A Financial Emergency?
Author: Abhi

14. Crypto Trading Signals – A Better Opportunity To Trade Like A Pro In 2024
Author: Growlonix

15. How To Check Loans Using A Pan Card
Author: Loanswale

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: