“Investing in silver via an ETF is a modern and smart way for investors to gain exposure to this precious metal in an easy, digital form. Increasing demand for silver in industries, newer technologies and a shift to renewable sources of energy and the safe-haven demand can also act as favourable tailwinds for the metal. However, investors should expect fluctuations in short-term returns, especially during times of market volatility. An investment in DSP Silver ETF is suitable for investors looking to diversify, or for experienced investors or those with access to expert financial advice,” says Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Investment Managers.
A press release from the fund house said that silver offers advantages to investors like hedging against a standard ‘equity-debt portfolio’ due to its low correlation with equity and negative correlation with debt. This may make it a favourable diversifier, especially in troubled times. Silver can also potentially act as leverage against the depreciating rupee. Silver in INR terms has outperformed Silver in USD due to currency depreciation.
Investing in silver is a high-risk strategy and is more suited for experienced investors who understand precious metals or commodities cycles. Investors must be prepared to face short term fluctuations and stay resilient through such times.