When Will Lump-Sum Investments in Silver ETF FoFs Resume?

Kotak Mutual Fund was the first to announce a temporary suspension of lump-sum and switch-in investments in its Silver ETF Fund of Funds (FoF). The decision comes amid a steep rise in domestic silver premiums, which have climbed nearly 10% above global prices. The fund said the pause was necessary to protect investors from overpaying during an unusually volatile phase in the silver market.

When Will Investments Resume?

Kotak Mutual Fund has clarified that lump-sum and switch-in subscriptions will resume once premiums return to “acceptable levels.” Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs), however, remain unaffected. The timing of the resumption will depend on how quickly physical silver supply stabilises and premiums align with global market rates.

Factors Behind the Silver Premium Surge

India, the world’s largest consumer of silver, is currently grappling with a severe supply shortage. Imports have fallen sharply, even as festive and investment demand has surged ahead of Diwali. Global supply has also been tight, with silver production lagging due to its dependence on other metal mining. These factors have created a supply-demand imbalance, driving local prices higher than international benchmarks.

Also Read: SBI, UTI, Kotak Halt Lump-Sum Investments in Silver FoFs Amid Soaring Prices!

Conclusion

While the suspension is temporary, investors may need to wait until the silver market cools down. The move underscores the fund houses’ focus on investor protection during periods of price distortion, ensuring fair value when subscriptions reopen.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.