Silver ETF Fund of Fund Subscriptions Hit Snooze Mode—HDFC and Nippon India Lead Caution Charge

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HDFC Mutual Fund has temporarily restricted new subscriptions to its Silver ETF Fund of Fund after 3 PM on October 14, 2025, allowing a daily cap of Rs 1 lakh per PAN. Nippon India Mutual Fund has also imposed subscription limits effective October 15, reflecting sector-wide caution as silver prices remain volatile.

In response to the recent sharp fluctuations and increased premiums in silver prices, major mutual fund houses are taking cautionary steps to protect investor interests in silver Exchange Traded Fund (ETF) Fund of Funds (FoFs). Notably, HDFC Mutual Fund and Nippon India Mutual Fund have introduced temporary subscription caps to manage market risks and liquidity challenges.

HDFC Mutual Fund announced a restriction on fresh subscriptions to its HDFC Silver ETF Fund of Fund starting post the 3:00 PM cut-off on October 14, 2025. Investors can now subscribe only up to Rs 1 lakh per PAN per day through lump-sum purchases, switch-ins, or new systematic registrations such as Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs). Importantly, all existing SIP/STP registrations and redemption or switch-out transactions will continue unchanged, ensuring ongoing investor activities are not disrupted.

Similarly, Nippon India Mutual Fund has decided to limit new subscriptions to its Nippon India Silver ETF Fund of Fund starting October 15, 2025. This move mirrors the industry trend amid heightened silver price volatility and supply constraints observed in physical silver markets, which influence underlying ETF valuations.

Key highlights include:

HDFC Mutual Fund’s subscription restriction applies after 3 PM on October 14, imposing a Rs 1 lakh per PAN daily subscription limit.
Existing systematic plans (SIPs, STPs) and redemption/switch-out transactions remain unaffected.
Nippon India Mutual Fund’s subscription limit became effective from October 15, reflecting precautionary measures due to ongoing market volatility.
These measures follow similar steps by other fund houses like Kotak, SBI, UTI, Tata, and ICICI Prudential Mutual Funds, many of which have suspended or limited silver ETF FoF subscriptions.
The controls aim to address liquidity challenges and protect investors from inflated premiums caused by demand-supply imbalances in physical silver.
Despite these restrictions, silver ETFs have delivered strong returns through 2025, driven by supply deficit and investor interest in precious metals.

Investors are advised to monitor these developments closely and exercise caution while investing in silver-based mutual funds during this unsettled market phase, considering the premium risks and ongoing regulatory responses.

Sources: The Economic Times, Moneycontrol, Value Research Online, Market Screener

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