Nippon India Silver ETF 2022, Fund of Fund Detail

Nippon Life India Asset Management Limited (NAM India), asset manager of Nippon India Mutual Fund (NIMF), has launched Nippon India Silver ETF, which will invest in physical silver and silver related instruments and Nippon India Silver ETF Fund of Fund (FOF), which will invest in units of Nippon India Silver ETF.

The New Fund Offer (NFO) for both schemes open on 13th January 2022 and close on 27th January 2022, NIMF said in a statement. The ETF will be passively managed and track the domestic price of silver.

For investing in Nippon India Silver ETF, the minimum amount required during NFO is Rs 1,000 and in multiples of Re. 1 thereafter. For Nippon India Silver ETF Fund of Fund (FOF), the minimum investment amount required during NFO is Rs.100 and in multiples of Re. 1 thereafter.

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NIMF said that the ETF would invest in physical silver and silver related instruments and the performance of the scheme will be be benchmarked against the domestic price of silver (based on LBMA Silver daily spot fixing price). Physical silver will be of 99.9 per cent purity (999 parts per thousand) conforming to London Bullion Market Association (LBMA) Good Delivery Standards.

Investors can participate in NIMF’s FoF without the need to have a Demat account. They can also opt for Systematic Investment Plans (SIPs), NIMF said.

Investment objective

According to the statement, the investment objective of Nippon India Silver ETF is to generate returns that are in line with the performance of physical silver in domestic prices, before expenses, subject to tracking errors.

The investment objective of Nippon India Silver ETF Fund of Fund (FOF) is to seek to provide returns that closely correspond to returns provided by Nippon India Silver ETF by investing in units of Nippon India Silver ETF.

No guarantee

NIMF said there can be no assurance or guarantee that the investment objective of the Schemes will be achieved.

Commenting on the the new ETF and FoF, Hemen Bhatia, Head ETF, Nippon India Mutual Fund said, “Historically, Silver has a relatively low correlation to Indian Equity Indices and hence, it will provide an opportunity to investors to diversify their portfolio as part of their asset allocation.”

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“Further, investing through Nippon India Silver ETF or Nippon India Silver ETF Fund of Fund (FOF) will provide the benefit of hassle-free storage, investing in small denominations, no fear of theft, easy liquidity as against holding physical silver and no worries about the purity of silver.”

Nippon India Silver ETF is an open-ended scheme, listed on the Exchange in the form of an Exchange Traded Fund (ETF). It will be investing in physical silver and/or Exchange Traded Commodity Derivatives (ETCD) in Silver)

Should you invest?

Nippon India Silver ETF may be suitable for investors who are seeking to diversify their portfolio through asset allocation or investing in physical silver. However, mutual fund investments are subject to several risks. Therefore investors should consult their financial advisors if in doubt about whether the product is suitable for them.