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Silver funds/ ETFs - grabbed the limelight in 2022. But did they deliver?

Silver funds were flooded in the market last year, on expectations that the metal prices will rise due to their applications in the electric vehicle (EV) space, but did they deliver the promise?


Yet, despite the pomp and show, silver ETFs are down in the dumps, reducing our investment value by 5.5% on average over the last year.


Why? A slowdown in China, which consumes the most silver among major economies, caused silver prices to tumble in 2022.


Unhappy 2023?

Silver's script seems to be doomed in 2023 too. "We don't anticipate any major improvement in China's economy this year. If the Fed continues to increase the rates, silver is likely to see more pain this year too," said a fund manager on condition of anonymity.


We have never been big advocates of silver (or gold, for that matter). Unlike equity, bonds, or deposits, silver is an unproductive asset, and its price depends on the whims of demand and supply.


And the number backs our conviction too. Silver prices have hardly moved since 10 years!

Source: Valuresearch, Bankbazar



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