5 Silver ETFs – Silver ETFs Explained : Comprehensive Guide 2025

5 Silver ETFs : Silver has long been recognized as both a precious metal and an industrial resource, making it a uniquely positioned asset class in global and Indian markets. In 2025, with the growing volatility of traditional markets, investors in India are showing renewed interest in commodities, particularly silver.

Silver Exchange Traded Funds (ETFs) and Silver Fund of Funds (FoFs) have emerged as efficient ways for retail investors to gain exposure to silver prices without the challenges of holding the metal physically. This detailed guide explores how Silver ETFs work, why they’re gaining traction in India, and an in-depth review of five leading Silver ETF FoFs — UTI Silver ETF FoF, Nippon India Silver ETF FoF, Aditya Birla Sun Life Silver ETF FoF, Axis Silver FoF, and HDFC Silver ETF FoF.

Understanding Silver ETFs and FoFs in India

A Silver ETF is a financial instrument that aims to track the domestic price of silver. It is traded on the stock exchange just like shares, allowing investors to buy or sell units throughout the trading day. The value of each unit represents the market price of silver after accounting for fund expenses.

However, not all investors have demat accounts or the inclination to trade on exchanges. This is where Silver Fund of Funds (FoFs) come into play. A Silver FoF invests primarily in a Silver ETF — essentially giving investors indirect exposure to silver through the mutual fund route. You can invest in Silver FoFs using SIPs or lump-sum investments, similar to any mutual fund, and they do not require a demat account.

Why Invest in Silver ETFs or FoFs in 2025?

1. Hedge Against Inflation

Silver, like gold, is often considered a hedge against inflation. As the value of fiat currency weakens due to rising prices, the relative value of tangible assets such as silver tends to increase.

2. Industrial Demand Growth

Silver’s industrial demand continues to grow rapidly, especially in sectors like renewable energy, electric vehicles, and electronics manufacturing. The metal’s unique conductivity and reflective properties make it critical for solar panels, semiconductors, and batteries — all booming industries in 2025.

3. Portfolio Diversification

Investing in silver ETFs allows investors to diversify their portfolio beyond equities, fixed income, or real estate. Silver prices often move independently of traditional markets, providing a buffer during periods of market volatility.

4. Ease and Transparency

Silver ETFs and FoFs provide an easy and transparent way to participate in silver price movements without worrying about purity, storage, or theft, which are significant concerns with physical silver.

5. Accessibility

With most Silver FoFs allowing minimum SIPs starting from ₹100 to ₹500, exposure to commodities is now accessible to every type of investor — from beginners to seasoned market participants.

Key Factors to Consider Before Investing in Silver ETFs

1. Expense Ratio – The total cost charged annually by the fund for managing the investment.
2. Tracking Error – The difference between the fund’s returns and the actual performance of silver prices.
3. Liquidity – ETFs trade on exchanges, but FoFs rely on mutual fund redemptions; consider your liquidity preference.
4. Market Volatility – Silver prices can fluctuate significantly, so short-term investors must be cautious.
5. Investment Horizon – Silver should ideally be part of a medium- to long-term diversification strategy rather than a short-term speculative bet.

1) UTI Silver ETF FoF Regular – Growth

The UTI Silver ETF FoF Regular – Growth is designed to provide returns in line with the domestic price of silver by investing predominantly in the UTI Silver ETF.

Investment Objective:
To generate returns that closely correspond to the performance of silver, subject to tracking errors.

Key Features:

• Fund Type: Fund of Fund (FoF)
• Benchmark: Domestic Price of Silver
• Expense Ratio: Approximately 0.50% (Regular Plan)
• Investment Mode: SIP and Lumpsum available
• Liquidity: High, with standard mutual fund redemption timelines

Performance Overview (2025):
The fund has delivered strong one-year and three-year CAGR returns, driven by the rally in global silver prices and robust investor participation. UTI’s consistent portfolio management and relatively lower tracking error have made it one of the most reliable Silver FoFs in India.

Why Investors Prefer It:
UTI is known for its transparency and disciplined risk management. Investors seeking a trusted AMC with a strong record in commodity-based funds often gravitate toward UTI’s offering.

2) Nippon India Silver ETF FoF Regular – Growth

The Nippon India Silver ETF FoF mirrors the performance of the Nippon India Silver ETF, which holds physical silver.

Investment Objective:
To provide returns that closely track the performance of silver prices in the domestic market.

Key Features:

• Category: Commodities (Silver)
• Fund Type: Fund of Fund
• Expense Ratio: Around 0.52% (Regular Plan)
• Benchmark: Domestic Price of Silver
• AUM (Approx): Over ₹400 crore (as of 2025)

Performance Overview (2025):
This fund is among the top performers in the silver category, benefiting from Nippon India Mutual Fund’s strong asset management framework and lower expense ratio compared to peers.

Why Investors Choose It:
Nippon’s broad distribution network, transparency, and digital accessibility make it ideal for retail investors. Its historical performance shows consistency even during high market volatility.

Additional Benefit:
The Nippon India Silver ETF FoF has maintained competitive tracking efficiency, offering a near-perfect correlation with silver price movements in India.

3) Aditya Birla Sun Life Silver ETF FoF Regular – Growth

The Aditya Birla Sun Life Silver ETF FoF Regular – Growth aims to generate long-term capital appreciation by investing in units of the Aditya Birla Sun Life Silver ETF.

Investment Objective:
To provide investment returns corresponding to the returns of the underlying Aditya Birla Silver ETF, which in turn invests in physical silver.

Key Features:

• Type: Fund of Fund
• Expense Ratio: Approximately 0.55%
• Benchmark: Domestic Price of Silver
• SIP Option: Available
• Redemption: T+2 cycle

Performance Overview (2025):
In 2025, the fund has demonstrated steady performance aligned with silver’s market movement. Aditya Birla AMC’s experience in commodity ETFs has ensured efficient fund operations and strong investor communication.

Why Investors Consider It:
The fund’s balanced approach, moderate expense ratio, and brand reliability make it an attractive choice for both beginners and experienced investors seeking to diversify through silver exposure.

Risk Management:
Aditya Birla Sun Life emphasizes maintaining minimal tracking error and ensuring transparency in portfolio reporting, aligning with SEBI’s standards for commodity ETFs.

4) Axis Silver FoF Regular – Growth

Axis Silver FoF Regular – Growth invests predominantly in Axis Silver ETF, offering investors exposure to domestic silver prices without requiring direct ETF transactions.

Investment Objective:
To provide returns that closely reflect the performance of silver in the domestic market, subject to tracking error.

Key Features:

• Fund Type: Fund of Fund
• Category: Commodity (Silver)
• Expense Ratio: Around 0.45%
• Benchmark: Domestic Price of Silver
• Minimum SIP: ₹100

Performance Overview (2025):
Axis Silver FoF has gained popularity for its strong management practices and low-cost structure. Its NAV growth mirrors global silver trends, with significant gains seen during early 2025 as silver demand surged in industrial sectors.

Why Investors Prefer It:
Axis AMC’s reputation for disciplined fund management, clarity in communication, and investor-friendly technology platforms enhances the appeal of this fund.

Distinct Advantage:
Among Silver FoFs, Axis has one of the lower expense ratios, giving it a marginal performance advantage in the long term due to reduced expense drag.

5) HDFC Silver ETF FoF Regular – Growth

The HDFC Silver ETF FoF Regular – Growth is one of the largest Silver FoFs in India and benefits from HDFC AMC’s strong reputation and trusted brand equity.

Investment Objective:
To provide returns in line with the performance of silver prices, before expenses and subject to tracking errors.

Key Features:

• Category: Silver Fund of Fund
• Expense Ratio: Approximately 0.60%
• Benchmark: Domestic Price of Silver
• SIP Option: Available for both monthly and weekly intervals
• Liquidity: Redeemable on any business day

Performance Overview (2025):
HDFC Silver ETF FoF has maintained competitive returns with stable fund management and efficient tracking. The fund has performed well due to consistent inflows and effective cost management, offering investors strong medium-term returns.

Why Investors Prefer It:
Investors looking for a reliable AMC with a proven history in managing diversified mutual funds often choose HDFC’s Silver FoF for long-term exposure to precious metals.

Portfolio Management Strength:
HDFC’s disciplined investment process ensures that the fund’s allocation and rebalancing strategies are aligned with daily market movements, minimizing deviation from silver’s actual market performance.

Advantages of Investing in Silver ETF FoFs

1. No Demat Required: Perfect for traditional mutual fund investors who prefer SIP-based investing.
2. Portfolio Diversification: Offers a hedge against equity market volatility.
3. Transparent Pricing: NAVs are updated daily and reflect true silver price movement.
4. Tax Efficiency: Treated as non-equity funds, attracting long-term capital gains tax after three years with indexation benefits.
5. Professional Management: Managed by experienced fund houses that track silver prices efficiently.

Risks Involved in Silver ETF FoFs

1. Price Volatility: Silver can be more volatile than gold, influenced by both industrial demand and macroeconomic trends.
2. Global Economic Factors: Silver prices are affected by global currency movements, inflation data, and central bank policies.
3. Tracking Error: Although small, it can cause slight deviations from actual silver price performance.
4. Expense Ratios: The FoF structure adds another layer of cost compared to buying ETFs directly.
5. Liquidity Risks: Redemption may take a few days, unlike immediate liquidity in ETFs traded on exchanges.

Who Should Invest in Silver ETFs or FoFs?

Silver ETFs and FoFs are suitable for:

• Diversified Portfolio Investors: Those looking to include commodities as part of a balanced portfolio.
• Long-term Wealth Builders: Investors with a 3-5 year investment horizon aiming for inflation-beating returns.
• Non-Equity Market Participants: Those who prefer asset classes outside traditional equities and debt.
• SIP Investors: Individuals who prefer disciplined investing over time rather than timing the market.

Silver Price Outlook in 2025

Silver’s price trend in 2025 is influenced by industrial demand, global inflation, and precious-metal sentiment. Analysts expect silver to maintain steady demand from green technology and renewable energy sectors, particularly solar panel manufacturing and battery production. Central banks’ cautious monetary stance and higher physical demand from both investors and industries continue to support silver’s long-term bullish case. However, short-term fluctuations are expected as the market reacts to global economic data and commodity cycles.

Final Thoughts

Silver ETFs and Silver FoFs have democratized access to one of the most dynamic asset classes in the world. Whether you invest through UTI, Nippon India, Aditya Birla Sun Life, Axis, or HDFC, these funds provide a simple, regulated, and transparent route to participate in the silver market.

For investors in 2025, silver represents both opportunity and volatility. It is not a get-rich-quick scheme but rather a long-term diversification instrument. Investors should approach it with patience, clarity, and realistic expectations, understanding that silver’s dual nature — part precious metal, part industrial commodity — makes it move differently from equities and gold.

The best approach is to use Silver FoFs as part of an overall asset allocation strategy, not as the core of a portfolio. A 5–10% allocation in silver can help balance equity and debt exposure, providing a hedge during uncertain market conditions.

Conclusion

Silver ETFs and Silver FoFs in India offer an innovative way to invest in commodities without physical ownership hassles. In 2025, as global supply chains shift and the renewable energy boom accelerates, silver’s importance in both investment and industrial applications will likely grow. UTI, Nippon India, Aditya Birla, Axis, and HDFC have made silver investing accessible, transparent, and affordable for the average investor.

These five Silver ETF FoFs stand out for their fund management expertise, cost efficiency, and consistent tracking of silver prices. Whether you’re an experienced investor or someone exploring commodity investments for the first time, these funds represent an excellent gateway into the silver market.

Disclaimer: This content is strictly for educational and informational purposes only. It does not constitute financial, investment, or business advice. The author is not a SEBI-registered investment advisor. Mutual fund and ETF investments are subject to market risks, including fluctuations in silver prices. Please read all scheme-related documents carefully before investing. Past performance is not indicative of future results. Investors are encouraged to verify all details directly from the respective Asset Management Company (AMC) before making any investment decisions.