SBI Mutual Fund has announced the introduction of the SBI Silver ETF Fund of Fund, an open-ended scheme that invests in the SBI Silver ETF.


The new fund offer (NFO) for this scheme will be available for subscription starting June 27 and will close on July 5.


The primary investment objective of this fund is to deliver returns that closely mirror those of the SBI Silver ETF.


"In the current global economic landscape, there is a growing demand for metals that serve as an inflation hedge. Unlike gold, silver is extensively used in industrial applications, which enhances its long-term value. Therefore, investors seeking to diversify their portfolios into commodities might consider investing in the Silver ETF or the Fund of Fund to capitalize on its long-term growth potential," explained Shamsher Singh, MD & CEO, SBI Mutual Fund.


"Silver, being both a precious and industrial metal, has its demand tied to the growth of sectors such as electronics and renewable energy. This connection boosts silver's long-term growth prospects, making it a valuable investment for those looking beyond gold. Investing through an ETF or Fund of Fund offers a cost-effective and liquid investment option," added D P Singh, Deputy MD & Joint CEO, SBI Mutual Fund.


The scheme plans to allocate between 95% to 100% of its assets in silver and silver-related instruments. Specifically, the SBI Silver ETF Fund of Fund will primarily invest 95% to 100% of its assets in units of the SBI Silver ETF. The remaining up to 5% will be invested in government securities, including G-Secs, SDLs, treasury bills, and other instruments specified by the RBI, as well as triparty repo and units of liquid mutual funds. The minimum application amount during the NFO period is set at Rs. 5,000 per application, with additional investments accepted in multiples of Re. 1.