Groww Mutual Fund, one of India's prominent fintech-driven asset management companies, has officially launched the Groww Silver ETF, an open-ended exchange-traded fund (ETF) aimed at offering direct exposure to the domestic price of physical silver. This ETF is designed as a cost-effective alternative to owning physical silver, enabling investors to tap into the growing industrial and investment demand for silver without the traditional constraints of storage or security.

What is Groww Silver ETF?

The Groww Silver ETF is structured to track the domestic price of silver, using the daily spot fixing price published by the London Bullion Market Association (LBMA) as its benchmark. Unlike traditional investments in silver jewellery or physical silver bars and coins, this ETF invests in dematerialised silver units, removing logistical challenges while still offering the potential to benefit from silver’s price appreciation.

Why Invest in Silver Now?

Silver’s growing demand across industries such as electronics, electric vehicles, solar panels, and medical technology has made it a hot commodity in global markets. According to the Silver Institute, silver demand exceeded supply in 2024, reflecting increasing interest and utility in industrial sectors. The gold-to-silver ratio stood at 91.64 as of April 10, 2025 (NSE, Bloomberg), indicating that silver may be relatively undervalued compared to gold, offering room for price appreciation.

Key Features of the Groww Silver ETF

1. Low Correlation with Equities:
Silver typically shows low correlation with stock markets, meaning it can act as a diversifier in an investor's portfolio. During times of equity market volatility, precious metals like silver tend to maintain or gain in value, helping mitigate overall portfolio risk.

2. Liquidity:
Being an ETF, it is listed on the stock exchange, and investors can buy or sell units during market hours, offering easy entry and exit options just like a stock.

3. No Physical Storage or Insurance Costs:
As the fund holds silver in a dematerialised format, investors avoid costs associated with storing and insuring physical silver.

4. Transparent Pricing:
The ETF tracks the LBMA daily silver spot price, ensuring that pricing is based on a globally accepted standard, which adds transparency and consistency.

5. Zero Exit Load:
There is no exit load on this ETF, meaning investors can withdraw their investment without incurring any penalty, making it a flexible investment option.

Investment Objective

The primary goal of the Groww Silver ETF is to generate returns that reflect the performance of silver prices, subject to tracking error. It’s important to note that returns are not guaranteed, as silver prices can be volatile, depending on global economic and industrial trends.

Who Should Invest?

The Groww Silver ETF is ideal for:

• Retail investors seeking long-term capital appreciation through exposure to silver.

• Investors looking to diversify their portfolio with assets that have low correlation with equities.

• Individuals aiming to benefit from the industrial boom in silver usage.

• Investors who want to participate in silver price movement without owning physical silver.

NFO Details

The Groww Silver ETF is being introduced through a New Fund Offer (NFO):

• NFO Period: May 2 – May 16, 2025

• Minimum Investment: ₹500 and multiples of ₹1 thereafter

• Exit Load: Nil

This low minimum investment requirement ensures that the fund is accessible to retail investors, including first-time ETF buyers.

Industrial Demand and Supply Dynamics

Silver is no longer just a traditional store of value. Its industrial relevance has grown multifold over the past decade. The renewable energy sector—especially solar power—uses silver in photovoltaic cells, while the automotive industry increasingly relies on it for electric vehicle (EV) components. The Silver Institute’s report for 2024 highlighted that global silver demand exceeded supply, a rare occurrence that puts upward pressure on prices.

Diversification Benefits

Silver’s low correlation with other asset classes makes it a valuable diversification tool. While equity and bond markets react to macroeconomic changes, silver prices often move based on industrial consumption, global inflation, and geopolitical risks. Including silver in a portfolio can help cushion overall volatility, making this ETF an attractive proposition for strategic asset allocation.

Silver vs Gold – Valuation Gap

The gold-to-silver ratio, which measures how many ounces of silver are needed to buy one ounce of gold, stood at 91.64 as of April 10, 2025. Historically, a higher ratio indicates that silver is undervalued relative to gold, and may signal a potential catch-up rally. For long-term investors, this could be a strategic entry point into silver assets.

Ease of Investment

Since the ETF is traded on stock exchanges like NSE and BSE, it offers the same flexibility as buying stocks. Investors can use their existing trading and demat accounts to invest, without any additional documentation. This is a convenient option for tech-savvy and DIY investors looking to expand into commodity-linked instruments.

No Lock-in and No Penalty on Exit

With no exit load, investors are not penalised for redeeming their investment early, making this ETF suitable even for those who want shorter-term exposure to silver prices. The flexibility of an open-ended structure and exchange-based liquidity makes this an appealing choice for modern investors.

Final Thoughts

With industrial demand rising and silver trading at a relative discount compared to gold, the Groww Silver ETF offers a timely investment opportunity. Backed by the credibility of Groww Mutual Fund, this ETF provides a convenient, cost-effective, and flexible way to invest in silver.

Whether you're a seasoned investor or a first-time mutual fund buyer, the Groww Silver ETF can serve as a diversifying element in your portfolio, especially during uncertain or inflationary economic conditions. As silver continues to gain prominence in industrial applications and global investment markets, early participation through a structured product like this ETF could offer long-term advantages.

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