Axis Mutual Fund Launches ‘Axis Silver ETF’ And ‘Axis Silver Fund of Fund’

Key Highlights for Axis Silver ETF:

•          Category: An open ended scheme replicating/tracking domestic price of Silver

•          Benchmark: Domestic price of physical Silver based on LBMA Silver daily spot AM fixing price 

•          Fund Manager: Pratik Tibrewal, Fund Manager, Commodities 

•          NFO open date: 2nd September, 2022 | NFO close date: 15th September, 2022

•          Minimum Application Amount: INR 500 per application and in multiples of INR 1/- thereafter

•          Creation Unit Size: 30,000 units of the ETF (each unit of the ETF will be approximately equal to one gram of Silver) and cash component, if any

•          Exit Load: Nil

Key Highlights for Axis Silver Fund of Fund (Axis Silver FoF):

•          Category: An open ended fund of fund scheme investing in units of Axis Silver ETF  

•          Benchmark: Domestic price of physical Silver based on LBMA Silver daily spot AM fixing price 

•          Fund Manager: Aditya Pagaria, Fund Manager, Fixed Income

•          NFO open date: 2nd September, 2022 | NFO close date: 15th September, 2022

•          Minimum Application Amount: INR 5000 per application and in multiples of INR 1/- thereafter

•          Exit Load:

* If redeemed/switched out within 7 days from the date of allotment: 0.25%

* If redeemed/switched out after 7 days from the date of allotment: Nil

Axis Mutual Fund, one of the leading asset management companies in India announced the launch of Axis Silver ETF (an open ended scheme replicating/tracking domestic price of Silver) and Axis Silver Fund of Fund (an open ended fund of fund scheme investing in units of Axis Silver ETF), today. Pratik Tibrewal, Fund Manager, Commodities will be managing the Axis Silver ETF and the minimum application amount would be INR 500 per application and in multiples of INR 1/- thereafter. Aditya Pagaria, Fund Manager, Fixed Income will be managing the Axis Silver FoF and the minimum application amount be INR 500 and in multiples of Re 1/- per application in the ETF & INR 5,000 and in multiples of INR 1/- thereafter in the FoF. Both the funds will be benchmarked against the LBMA Silver daily spot AM fixing price and both NFOs open for subscription on 02nd September 2022 and close on 15th September 2022.

As a precious metal, Silver has always found a place of significance in the Indian culture. However, investing in Silver in its physical form may pose challenges with respect to corrosion over time, safety, purity of the metal, liquidity risk etc. Thankfully, investors can opt to gain exposure to the precious metal via an ETF (Exchange Traded Fund) that aims to generate returns in line with the performance of physical silver in domestic prices, subject to tracing error. Investors who do not have a Demat account can gain exposure by investing in Silver FoF (Fund of Fund).

Fundamental Drivers of the Silver Market

A versatile metal, Silver has widespread usage across multiple sectors, thereby creating a unique opportunity for investors. A testament to its growing importance is that it has gained increased acceptance even in industries like Bio Pharma and Medical Technologies, Power Generation and Clean Energy, and Electric Vehicles and Mobility Technologies by powering new-age technologies to solve global challenges. Furthermore, Silver not only provides diversification to the portfolio but also has the potential to provide a hedge against inflation. One of the key factors that make the economic outlook of silver promising is the expected rise in its demand going forward outpacing supply.

Salient features of the Axis Silver ETF and Axis Silver FoF:

·         Funds will invest in industry standard 30 kg Physical silver bullion of 999 parts per 1000 fineness

·         Purchase/sale of Silver done with reputed institutions and bullion traders to ensure minimal trading costs and quality

·         Hassle free ownership in Demat form*/MF Units**

·         Storage, transport and insurance hassles of Silver taken care by Axis AMC

·         Exchange liquidity – Investors can buy and sell ETF units on NSE at their convenience

Chandresh Nigam, MD & CEO, Axis AMC said, “Silver’s interesting proposition wherein it has the ability to act as an industrial commodity as well as a precious metal is one of the key factors that we believe will drive its significance. Now that investors have access to investing in Silver via ETFs, it will further increase the metal’s value as a promising asset class in the future. With the launch of Axis Silver ETF and Axis Silver FoF, we aim to seamlessly integrate available market opportunities with an investment strategy that allows investors to gain distinctive exposure to the metal. The new scheme’s approach aligns with our philosophy and we believe, will be a notable addition to our portfolio of products.”

*Axis Sliver ETF units will be available in dematerialized unit form only

**Axis Silver FoF will invest a majority of its assets in Axis Silver ETF and investors will be allotted MF units that can be freely transacted directly with the AMC subject to applicable exit loads, levy’s and taxes as applicable. Units of Axis Silver FoF will not be listed on exchange platforms.

Sources: AMFI, Axis MF Research

Note: Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

The product labelling assigned during the New Fund Offer is based on internal assessment of the Scheme Characteristics or the model portfolio and the same may vary post NFO when actual investments are made.

Investors will be bearing the recurring expenses of the scheme in addition to the expenses of other schemes in which Fund of Funds scheme makes investment.