HDFC Silver ETF Fund Reignites Investment Opportunities Amid Market Volatility

HDFC Mutual Fund has resumed new subscriptions in its Silver ETF Fund of Fund after a temporary cap following sharp silver price volatility. Existing SIPs and redemptions remained unaffected during the restriction period. The move aligns with cautious industry-wide measures amid premium pricing and supply constraints.

HDFC Mutual Fund has restored subscription facilities in its HDFC Silver ETF Fund of Fund (FoF) after a temporary restriction implemented earlier this month due to sharp volatility in silver prices. This move aims to balance investor protection amidst market fluctuations with renewed investor demand for silver exposure through mutual funds.

Key Highlights:

Resumption of Subscriptions: Following a brief pause on fresh investments from October 14, 2025, HDFC Mutual Fund has resumed accepting new lump-sum purchases, switch-ins, and systematic investment plans (SIPs) in the Silver ETF FoF.

Previous Restriction: The temporary halt was introduced to protect investors amid heightened premiums and supply constraints in the domestic silver market, following similar actions by other major fund houses including Kotak, SBI, UTI, and ICICI Prudential.

Subscription Limits: Initially, subscriptions were capped at Rs 1 lakh per PAN per day to limit exposure during the turbulent period, ensuring manageable fund flows and price stability.

Existing Investor Transactions: Throughout the restriction, existing SIPs, systematic transfer plans (STPs), redemptions, and switch-outs continued without interruption to maintain continuity for existing investors.

Market Context: The sharp rise in silver prices domestically, trading at a premium over international benchmarks, created a challenging environment for efficient ETF unit creation and pricing, leading to the cautious stance taken by fund houses.

Investor Guidance: HDFC Mutual Fund reassures investors about continued transparency and encourages monitoring market conditions before further investment decisions.

Broader Industry Movement: Multiple mutual funds have instituted similar subscription caps or suspensions, reflecting widespread caution across the asset management industry regarding precious metals.

Long-Term Perspectives: Experts suggest investors keep a long-term horizon while investing in silver ETFs and remain attentive to physical silver availability impacting fund valuations.

HDFC Silver ETF Appeal: Known for providing digital access to silver investment without storage risks, the ETF remains popular among retail and institutional clients.

Outlook: As physical silver market conditions stabilize and ETF premium reduces, full subscription reopening may be expected, restoring normal investment flows.

This development marks a prudent step balancing investor protection and market participation, indicative of the dynamic nature of commodity-based investment funds.

Sources: Economic Times, Moneycontrol, ICICI Direct, FundsIndia

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