Markets regulator SEBI on Tuesday allowed mutual fund companies to launch silver ETFs after its board meeting. Till now there was no silver ETF in the market. Silver and crude oil ETFs (Exchange traded funds) were in demand for a long time. Experts agree that silver, platinum and palladium are good ways to diversify an investor’s portfolio. With this, investors do not have to depend only on precious metals like gold or diamond.
Regulatory rules of Silver ETF will be same as Gold ETF
The SEBI board on Tuesday approved amendments to the SEBI (Mutual Funds) Regulations, 1950 to introduce silver ETFs with certain safeguards under the regulatory mechanism of gold ETFs. In the recent past, investors have started investing rapidly in silver along with gold. This is the reason why the need for Silver ETFs was being felt.
Gold business will now be absolutely true, electronic gold receipt will be bought and sold in gold exchange – know how the system will work
Country’s largest gold ETF with Nippon India
As far as gold ETFs are concerned, Nippon India ETF Gold BeES is the largest gold ETF in India. Its AUM is more than Rs 6000 crore. Next comes the number of HDFC Gold ETF and SBI ETF Gold. The AUM of HDFC Gold ETF is Rs 2,682 crore and that of SBI ETF Gold is Rs 2,354 crore. Experts believe that although silver has always been associated with gold, it may now have independent demand and supply dynamics.
Like the Association of Mutual Funds in India (AMFI), Gold ETFs represent physical gold. Which is in paper or demat form. One gold ETF is equal to one gram of gold. Under this, very high quality physical gold is guaranteed. Gold ETFs are listed on NSE and BSE and are also traded on them. Gold ETF refers to the purchase of gold in electronic form.
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