Mumbai: Silver exchange-traded funds (ETFs) have delivered impressive returns so far in 2026, with some funds posting gains of over 30%. As the MCX silver futures approach Rs 3,19,949 per kilogram, experts suggest that existing investors may continue to accumulate, while new investors could consider adding silver to their diversified portfolios.
Strong Performance in Early 2026
In the first 20 days of 2026, commodity ETFs based on silver have collectively returned over 25%, with eight funds surpassing 30%. Tata Silver ETF Fund of Funds (FoF) leads the pack with a return of 32.29%, followed closely by Nippon India Silver ETF FoF, which has gained 31.28%. Other notable performers include UTI Silver ETF, which delivered 20+% returns in the same period.
Expert Opinions and Market Outlook
Garg, an industry analyst, emphasized that market dips present good buying opportunities for long-term investors. He highlighted that gold and silver are crucial assets given the ongoing central bank purchases, monetary easing policies, and rising industrial demand for silver.
A recent report by Tata Mutual Fund projects that silver may continue to trade with high volatility but remain firm due to robust demand, supply constraints, and inventory dislocations. The report suggests a data-driven approach for medium- to long-term investments, with key bullish factors being increased industrial use and potential Fed rate cuts. Investors are encouraged to consider systematic investment plans (SIPs) to build positions gradually.
Remarkable Returns and Market Drivers
Over the past year, silver ETFs have delivered extraordinary returns—more than 200%. Tata Silver ETF recorded the highest gains, with Nippon India Silver ETF close behind at 212%, and UTI Silver ETF providing 206%.
Satish Dondapati, Fund Manager at Kotak Mutual Fund, noted that silver prices have surged over 170% in the last year, outperforming gold’s 70% gain. He attributed this rally to ongoing tariff concerns, persistent delivery issues between London and New York, and expectations of falling real interest rates, which make silver an attractive safe-haven asset.
Changing Gold/Silver Ratio
The gold-to-silver ratio has decreased from 82 to 58 within a month, indicating that silver is relatively cheaper compared to gold. This shift could make silver more appealing to traders expecting the ratio to revert to its historical averages.
Conclusion
While the strong performance of silver ETFs offers promising prospects, analysts advise caution due to inherent volatility. Investors are encouraged to carefully evaluate market conditions and consider systematic investment strategies before making new commitments.
