Major Mutual Funds Halt Subscriptions In Fresh Silver ETF Fund Of Funds: What Indian Investors Need To Know

Three major mutual fund houses of India, SBI Mutual Fund, Kotak Mutual Fund, and UTI Mutual Fund, have temporarily halted fresh lumpsum investments in their respective Silver ETF Fund of Funds (FoFs).

Reason Behind The Move

In separate notices issued over the past week, the fund houses said the move is aimed at protecting investor interests, as shortages of physical silver have affected the creation of new ETF units and caused domestic silver prices to trade at a premium to international levels.

According to SBI Mutual Fund’s notice dated Oct. 13, 2025, the decision follows a sharp surge in demand for silver in recent weeks, “driven by global macroeconomic factors and increased investor interest in commodities.”

Impact On Investors

The fund said that due to the limited availability of physical silver, there has been a constraint on the creation of new units by silver ETFs at indicative net asset value.

SBI Mutual Fund stated that it has “decided to temporarily suspend all fresh subscriptions through lumpsum investment” in its SBI Silver ETF Fund of Fund with effect from Oct 13, 2025.

However, the fund clarified that “all existing and new Systematic Investment Plan, Systematic Transfer Plan, etc., offered by the scheme will remain operational.”

Other Fund Houses

Kotak Mutual Fund, in a notice dated Oct 9, 2025, also announced a temporary suspension of fresh and additional lumpsum and switch-in transactions into its Kotak Silver ETF Fund of Fund.

The fund attributed the step to “current market conditions” where “silver is trading at a premium relative to international prices, primarily due to a shortage of physical silver in the domestic market.” It added that the premium in domestic prices directly affects the valuation of the scheme.

UTI Mutual Fund took a similar step on Oct 10, 2025, informing distributors through the BSE STAR MF platform of a “temporary suspension of subscription through lumpsum investment and switch-ins” under the UTI Silver ETF Fund of Fund.

Expert Opinion

Two market experts NDTV Profit spoke to said the suspensions are precautionary measures in response to temporary supply constraints. Both indicated that the restrictions are likely to be lifted once the availability of physical silver improves and domestic prices align more closely with international levels.

Indian investors looking to invest in silver ETFs or fund of funds should keep an eye on the developments and consider consulting with a financial advisor before making any investment decisions.

Investing In Silver

Silver has been a popular commodity investment option for Indian investors, and the recent surge in demand has led to a shortage of physical silver.

Investors looking to invest in silver can consider silver ETFs or physical silver investments. However, it’s essential to keep in mind the current market conditions and the potential risks associated with investing in commodities.

Conclusion

In conclusion, the temporary suspension of fresh lumpsum investments in Silver ETF Fund of Funds by major mutual fund houses is a precautionary measure to protect investor interests.

Indian investors should stay informed about the developments in the silver market and consider consulting with a financial advisor before making any investment decisions. With the right knowledge and strategy, investors can navigate the current market conditions and make informed investment choices.