DSP Mutual Fund Files Draft for Silver ETF Fund of Fund

DSP Mutual Fund has filed draft documents with SEBI for the launch of the DSP Silver ETF Fund of Fund, an open-ended scheme that will invest in units of the existing DSP Silver ETF. The scheme is to provide returns that closely correspond to the performance of physical silver, without directly investing in it.

Fund Structure and Allocation

Under normal circumstances, the scheme will allocate 95% to 100% of its assets to units of the DSP Silver ETF. The remaining 0% to 5% may be held in cash or cash equivalents, including TREPS, treasury bills, and government securities with a residual maturity of less than 91 days. The scheme will not invest in international securities, derivatives, debt instruments, or other mutual funds.

Benchmark and NAV Disclosure

The benchmark for the scheme is the domestic price of physical silver, based on the London Bullion Market Association (LBMA) daily spot fixing price. NAVs will be calculated on all business days and disclosed by 10 a.m. the next day on the AMC and AMFI websites.

Fund Details

The New Fund Offer (NFO) details are as follows:

• New Fund Offer Price: ₹10 per unit
• Minimum Application Amount: ₹100 and any amount thereafter
• Exit Load: Nil
• Expense Ratio (TER): Up to 1.00% of daily net assets, in addition to the DSP Silver ETF’s existing expense ratio of 0.5044% (as of Jan 31, 2025)
• Plan Options: Growth and IDCW (Payout/Reinvestment)

The scheme will be managed by Anil Ghelani and Diipesh Shah, both of whom currently manage DSP’s range of ETF and passive products.

Liquidity and Transactions

Redemption proceeds are expected to be processed within three working days. The scheme is not listed on stock exchanges but offers daily purchase and redemption. Facilities like SIP, STP, SWP, ASBA, and switching from other DSP schemes are available.

Conclusion 

The DSP Silver ETF Fund of Fund offers exposure to silver through a structured mutual fund route. It mirrors the performance of physical silver by investing entirely in the DSP Silver ETF. The scheme is currently awaiting regulatory approval.

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 in the securities market are subject to market risks, read all the related documents carefully before investing.