Silver ETF AUM Doubles in 2025: Why Silver is Outpacing Gold ETFs
Problem: Investors often flock to gold during economic uncertainty, but few realize silver might offer even greater potential—both as a precious metal and an industrial asset.
Promise: This article explores why Silver ETFs are surging, outperforming Gold ETFs in 2025, and how you can take advantage of this rising trend for smarter investing.
Unprecedented Growth in Silver ETFs
Silver ETFs in India have seen 125.68% growth in AUM (Assets Under Management) over the past year, significantly outpacing gold ETFs, which grew 81.78%. Investor accounts in silver ETFs reached 8.37 lakh by May 2025, with inflows worth ₹853.85 crore just in that month.
SEBI's approval of Silver ETFs in 2021 provided the necessary framework, and the post-COVID industrial recovery, coupled with inflationary fears, gave silver a major boost.
Why Are Investors Choosing Silver Over Gold?
- Industrial Demand: Silver is used in solar panels, electric vehicles, semiconductors, and medical tech.
- Dual Utility: Unlike gold, which is mainly ornamental and investment-driven, silver benefits from both industrial and investment demand.
- Inflation Hedge: Investors seek real assets like silver during inflationary times, making it a strategic hedge.
- Supply Crunch: Mining output hasn't kept pace with demand, leading to bullish price sentiment.
Comparison: Silver ETFs vs. Gold ETFs
| Criteria | Silver ETFs | Gold ETFs |
|---|---|---|
| 1-Year AUM Growth | 125.68% | 81.78% |
| Investor Folios (May '25) | 8.37 lakh | 7.25 lakh |
| Volatility | High (±15%) | Moderate (±10%) |
| Taxation | Same as gold (LTCG after 3 years) | Same |
Top Performing Silver ETFs in India (2025)
- Nippon India Silver ETF: Low tracking error and high liquidity; ideal for short- and medium-term holdings.
- ICICI Prudential Silver ETF: High AUM and transparent disclosures; good for long-term holding.
- HDFC Silver ETF: Popular with retail investors due to ease of SIP investment and better NAV tracking.
Risks & Things to Keep in Mind
- Volatility: Silver prices are more volatile due to dual demand sources.
- Global Trade Dependency: Industrial demand ties silver prices to global trade and supply chains.
- Tracking Errors: Some ETFs may lag behind actual spot silver prices.
- Storage Costs: These are baked into the ETF expenses and can affect returns.
Expert Opinions and Outlook
Analysts believe silver could outperform gold in 2025 due to its rising industrial demand. According to Edelweiss Research, silver may cross ₹1,25,000/kg by the end of 2025 if current macro trends continue. The World Bank and IMF both cite silver’s role in renewable energy as a key price driver.
Meanwhile, investors await the U.S. CPI data and geopolitical trade developments, which could influence both silver and gold prices significantly in the short term.
How to Invest in Silver ETFs in India
- Open a Demat and Trading account with a registered broker like Zerodha, Groww, or Upstox.
- Choose a Silver ETF based on AUM, expense ratio, and liquidity.
- Use your broker's platform to buy units during market hours.
- Monitor performance quarterly and consider rebalancing annually.
Internal Resources for Further Reading
FAQs
1. What is a Silver ETF?
It’s an exchange-traded fund that invests in physical silver or silver derivatives and trades on the stock exchange like a share.
2. Are Silver ETFs better than physical silver?
Yes, due to ease of trading, storage safety, and tax efficiency, ETFs are better suited for modern investors.
3. How are Silver ETFs taxed?
Similar to gold ETFs: Long-term capital gains apply after 3 years at 20% with indexation benefits.
4. Can I start a SIP in Silver ETFs?
Yes, many brokers now allow monthly SIPs in silver ETFs, just like mutual funds.
5. Is silver more profitable than gold?
Potentially yes, especially during industrial booms and inflationary cycles—but with higher risk.
Conclusion
Silver ETFs have emerged as a powerful alternative to gold, offering both industrial growth potential and inflation protection. With AUM growth of 125.68%, this asset class is proving its merit among Indian investors. While risks exist, a diversified portfolio with a silver allocation can yield strong returns in a high-volatility, high-inflation world.
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