Kotak MF temporarily halts fresh investments in Silver ETF Fund of Fund; SIPs, redemptions unaffected
Kotak Mahindra Asset Management Company Limited (KMAMC) has announced a temporary suspension of fresh and additional lumpsum or switch-in investments in its Kotak Silver ETF Fund of Fund effective October 10, 2025, citing current market conditions and an abnormal premium in domestic silver prices.
In a post on X (formerly Twitter), Nilesh Shah, Managing Director of Kotak Mutual Fund, wrote, “Keeping in mind the high spot premium for Silver over the import parity price, Kotak MF is suspending lump sum subscription in Kotak Silver ETF Fund of Fund. (Refer to the attached addendum for details). SIPs and redemptions will continue as before in the regular course of business. Kotak Silver ETF, being a listed fund, doesn’t have a provision for suspension. Whenever the spot premium aligns with the import parity price, the fund of fund will open for subscription as we continue to maintain a bullish outlook on Silver as an asset class on a long-term basis.”
Kotak’s official notification
In its official Notice-cum-Addendum, the fund house said, “Investors are hereby notified that, due to current market conditions, silver is trading at a premium relative to international prices. This is primarily due to a shortage of physical silver in the domestic market.”
The communication added that all purchase or switch-in transactions timestamped on or before 3:00 PM on October 9, 2025, will be processed at the applicable NAV, while Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs) will remain fully operational. Redemptions and switch-outs will also continue as usual.
Kotak clarified that the suspension is temporary in nature and will remain in effect until further notice. All other terms and conditions of the Scheme Information Document (SID) and Key Information Memorandum (KIM) remain unchanged.
In an earlier post, Shah highlighted the widening price differential, noting: “Most important thing to watch is the Premium on the Spot silver. Due to speculation or short covering the spot silver for last two days is trading at a premium of 10–12% over import parity prices. Premiums don’t last long. Their costs remain forever.”
The Kotak Silver ETF Fund of Fund invests in units of the Kotak Silver ETF, an exchange-traded fund that tracks the domestic price of silver. The recent surge in spot silver prices — trading at a 10-12% premium over import parity levels — has prompted this temporary suspension to protect investor interests.