SBI Mutual Fund suspends new investments in Silver ETF Fund of Fund amid supply crunch

SBI Mutual Fund has temporarily halted fresh investments in its Silver ETF Fund of Fund (FOF) from October 13, 2025, citing tight availability of physical silver and heightened global demand. The move follows similar decisions by Kotak Mutual Fund and UTI Mutual Fund in recent weeks, as the silver market faces a global supply squeeze.

Global demand fuels silver rally

In a notice issued on October 11, the fund house said silver has seen a sharp increase in demand, driven by global macroeconomic factors and renewed investor interest in commodities. However, the limited availability of physical silver has constrained the creation of new units at the indicative Net Asset Value (iNAV), which directly affects the valuation of the fund.

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The SBI Silver ETF Fund of Fund invests in the SBI Silver ETF, an exchange-traded fund that tracks the domestic price of silver. As domestic silver prices have moved to a premium, the fund said it acted to safeguard investors' interests by temporarily suspending new subscriptions.

Suspension applies only to new investments

The suspension applies to all fresh lump-sum investments, including additional purchases and switch-ins. However, existing Systematic Investment Plans (SIPs), Systematic Transfer Plans (STPs), redemptions and switch-outs will continue as usual, according to the notice issued by Nand Kishore, Managing Director and Chief Executive Officer of SBI Funds Management Limited.

"The suspension is temporary in nature and will continue only till further notice," the fund stated, adding that all other terms and conditions of the scheme remain unchanged.

SBI Mutual Fund's decision makes it the third major asset manager to restrict inflows into silver-linked schemes.