Silver or Silver ETFs: Which has given higher return on Rs 10 lakh initial investment?
Top Silver ETF vs silver return in 2 years since launch of Silver ETFs in India: Silver other than its massive industrial use has also attracted investors as an investment avenue. Silver metal in Hinduism is associated with moon and is revered as pure. The glistening white metal is deemed to bring in mental peace to its wearer.
But now similar to other asset classes, there are silver ETFs which have been introduced lately considering the physical wearing and other aspects concerning physical silver.
So, as silver ETFs came into existence only 2 years ago in India i.e. in 2022, here is a quick take on which asset category- the metal in physical or digital form has performed better.
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Silver ETF allocation
As laid out by the SEBI, silver of 30 kg bars with fineness of 999 parts per thousand (or 99.9 per cent purity) conforming to London Bullion Market Association (LBMA) Good Delivery Standards may only be permitted. Additionally, the remaining corpus is allowed towards cash and other cash equivalents.
Top silver return and annualised return
While silver ETFs over the 2-year period has produced an annualised return of 27 per cent on an average, HDFC Silver ETF has been the top perfomer.
HDFC Silver ETF
HDFC Silver ETF has topped among its peers including ICICI Prudential Silver ETF, DSP Silver ETF, Axis Silver ETF among others. For relevance, we have only incorporated silver ETFs in existence for 2 or more years. The ETF in 2 years has turned Rs 10 lakh into Rs 16,28,024.
Silver price in 2022
Silver price in 2022 quoted around Rs 55,100 per kg and for 10 lakh investor would have been able to purchase over 18 kg of silver.
Gains on physical silver
At the current spot rate of silver of Rs 90,371 per kg, investor would have turned Rs 10 lakh worth of investment into Rs 16,40,127. Implying here that the Silver metal in its physical form has turned out to be a slightly better avenue with a tad differential in gains in comparison to silver ETFs.
Silver versus Silver ETF
Herein silver has been more rewarding may be because of the expense ratio charged by the fund houses.