Why is silver creating such buzz? Naveen Mathur decodes

After outperforming the lustrous gold by 12 percentage points, with over 46% returns in FY 2020-21, the white metal has grabbed the attention of retail investors. Three mutual funds — ICICI Pru, Nippon India and Aditya Birla Sun Life — now offer silver exchange traded funds (ETFs) and silver fund-of-funds (FoFs). The new fund offers (NFOs) are open for subscription.

"It was a long pending industry demand to allow silver as part of the ETF basket. It's a very strong asset class," says Naveen Mathur, director of commodities and currencies at Anand Rathi Shares and Stock Brokers.

But will it be able to replace gold in the portfolio? Is it an important asset class in one's portfolio? Naveen Mathur calls silver as a trader's asset due to the volatility and dynamism it offers. For retail, he says, it serves as a purpose beyond gold to hedge risk as a diversifier in a portfolio.