Aditya Birla Sun Life Mutual Fund and Mirae Mutual Fund file for first set of silver ETFs.
December 03, 2021 / 01:58 PM IST
Amid reports that the government will not be banning cryptocurrencies outright in its proposed Cryptocurrency Bill, but lay down a regulatory framework, Flipkart founder Sachin Bansal-backed Navi Mutual Fund has filed for a blockchain fund. To be sure, the final contours of the Bill are not yet out.
Navi Blockchain Index Fund of Fund (FoF) will invest in ETF or an index fund that tracks the performance of Indxx Blockchain Index. Indxx is an index provider that develops specialised indices.
It would be interesting to see when blockchain fund is finally launched, after Invesco MF had to delay launch of its own blockchain fund due to regulatory uncertainty.
The Reserve Bank of India recently raised concerns on cryptocurrencies. The blockchain technology is used in cryptocurrencies, as well as it is now seeing growing importance in providing safe passage for digital transactions and in cyber security.
Navi MF also filed for Navi World Index FoF, which will invest in units of an international ETF or index fund that tracks the performance of MSCI World Index.
First set of silver ETFs filed
Aditya Birla Sun Life Mutual Fund (MF) and Mirae MF have filed for silver exchange traded funds (ETFs), which were recently allowed by the Securities and Exchange Board of India (SEBI).
Silver ETFs will give retail investors exposure to a new asset class, which was so far not easy to access. Investors or traders interested in transacting in silver could only do so in the futures market of MCX so far.
In November, 2021, SEBI laid down the final norms on how it wants Silver ETFs to be managed by mutual funds.
Mutual funds will have to buy physical silver standard 30KG bars with 99.9 percent purity confirmed by the London Bullion Market Association (LBMA). Silver ETFs shall be benchmarked against the price of silver (based on LBMA Silver daily spot fixing price).
The expense ratio of silver ETFs will not exceed 1 percent, just like any other ETF. Commodity experts say this will make it much cheaper to transact in silver, as the rollover costs in the futures market are 8-12 percent of the futures contract.
Like other ETFs, units of silver ETFs units will be listed on the stock exchanges. SEBI has directed mutual funds to appoint market makers to make sure there is enough liquidity on the stock exchanges so that transactions go through smoothly.
Tracking error cannot be more than two percent on an annualised basis. Tracking error is the difference between investment returns from physical silver and Silver ETF.
While Aditya Birla Sun Life MF and Mirae MF are the first ones to file for Silver ETFs, other mutual funds could also file soon.
Jash Kriplani is a journalist with over ten years of experience. Based in Mumbai. Covering mutual funds, personal finance. His last stint was with Business Standard, where he covered mutual funds and other developments in the financial markets
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