Silver ETFs trade at steep premiums amid physical supply shortage

Kotak MF halts lump sum, switch-in subscriptions in Kotak Silver ETF Fund of Fund

A sharp surge in demand has overwhelmed silver exchange-traded funds (ETFs). On Thursday, these ETFs were trading at noticeable premiums over their indicative net asset values (iNAVs), as mutual fund (MF) houses struggled to meet demand with fresh supplies while the underlying metal hit all-time highs.

 

Nippon India’s silver ETF, the largest in the category, closed at Rs 156 on Thursday, up 5.5 per cent over its iNAV of Rs 148.3. ETFs offered by HDFC MF, Tata MF, and UTI MF saw premiums of 10 per cent or higher.

 

Considering the scarcity of physical silver and the premium ETF pricing,