Silver ETFs deliver sparkling returns with top funds gaining over 84 percent in 2025

Silver Exchange Traded Funds (ETFs) have emerged as a brightest spot in 2025, outshining several assets this festive season, underscoring its place in Indian household as a store of value, not just as jewellery and artifact.

However, in the modern market, Silver ETFs have become a far more convenient and lucrative way to gain exposure to this precious metal, making them increasingly popular among both retail and institutional investors.

The domestic price of silver is Rs 156 per gram and Rs 1,56,000 per kilogram on October 6, higher by Rs 1,000 compared to Friday.

Why Silver ETFs are Shining

Auspicious dates such as Diwali, Dhanteras, and Akshaya Tritiya have always seen strong buying in silver, leading to a demand surge. This, coupled with a global appetite for hard assets in uncertain times, has meant that several investors have added silver to their portfolio. Silver ETFs offer an easy, transparent, and hassle-free way to own silver without worrying about purity or storage, making them ideal for younger investors as well as working professionals.

Based on NAV as on 30th September

A strong investment demand, supply deficit and US Fed rate cuts are expected to continue, thus supporting Silver prices over the medium to long term for three to five years, according to experts. Silver may outperform Gold in the medium term with favourable Gold-to-Silver ratio, strength in developed economies, strong industrial demand especially from China and global supply deficit projections.

However, investors need to be mindful of short-term volatility and macro headwinds, as per Tata Mutual Fund’s Gold and Silver Outlook Report for October 2025.

Starting the year at just $28.92 per ounce, Silver has skyrocketed to over $46 per ounce by late September, resulting in a 61% rise.

Outstanding 2025 Silver Performance

2025 has so far been a golden year for Silver ETFs, and if one compares the top six Silver ETFs by assets under management (AUM), the returns reveal a spectacular story of outperformance.

All leading Silver ETFs have delivered year-to-date (YTD) returns of over 83%, and one-year returns above 55%. Over a three-year horizon, funds with a solid track record have given compounded annual returns in the mid-30% range, remarkable for any asset class.

Why Now Might Be the Best Time

This may be an especially good time to consider adding Silver ETFs to one’s portfolio, as several factors are aligning in its favour.

On the global front, the industrial demand for silver is soaring due to its usage in electronics, solar power and electric vehicles, supporting long-term growth. From a portfolio strategy perspective, silver typically has a low correlation with equities, serving as a valuable hedge during periods of volatility, high inflation, or currency risk.

Moreover, the US Fed’s 25 bps rate cut in September 2025 had led to a rally in silver prices. “The expectation is that US Fed may cut rate by 25 bps again at the October meeting if the labor market continues to show weakness. US Fed will monitor the upcoming economic data before taking any further decisions as it faces risks of both higher inflation and weaker employment,” a Tata Mutual Fund report said.

Fed rate cuts generally contribute to dollar depreciation, which in turn supports higher
demand and prices for Silver.

Tax treatment of Silver ETFs

Gains from Silver ETFs are taxed like non-equity mutual funds, hence, holding them for over two years qualifies as long-term capital gains and is liable to be taxed at 12.5 percent. For short term capital gain, the returns are taxed at the slab rate.

With outsized returns and its deep cultural relevance, silver continues to shine bright this festive season. The ETFs based on the precious metal offer investors a great way to seamlessly combine tradition with modern investing.