Silver has re-emerged as one of the most discussed commodities among Indian investors. While gold traditionally dominates precious metal allocations, silver has quietly delivered strong price momentum over the last two years. Industrial demand, green energy expansion, and global macro uncertainty have pushed investors to reconsider their allocation strategy. If you are looking to diversify beyond equity and debt in 2026, you may consider evaluating the best silver mutual funds available in India. These funds allow you to participate in silver’s price movement without worrying about storage, purity, or liquidity.
In this detailed guide, we explore the best silver mutual funds, how they work, who should invest, risks involved, and how much allocation makes sense in 2026.
What Are Silver Mutual Funds?
Silver mutual funds in India typically operate as Fund of Funds (FoF). They invest in domestic Silver ETFs, which directly hold physical silver.
Silver mutual funds typically follow a two-layer structure. The mutual fund invests in a silver ETF, and the ETF holds physical silver. As silver prices rise or fall, the ETF adjusts accordingly, and the fund’s NAV mirrors that movement.
Most of the best silver mutual funds invest in high-liquidity Silver ETFs and maintain transparency regarding holdings and tracking error.
Key Features of Silver Mutual Funds Include:
- No need to store physical silver
- High liquidity
- Regulated by SEBI
- Suitable for SIP or lump sum investments
A knowledgeable mutual fund advisor can explain how these funds differ from gold funds and commodity ETFs before you invest.
Best Silver Mutual Funds to Invest in 2026
Based on AUM size, tracking efficiency, and fund house credibility, below are some of the best silver mutual funds in India for 2026.
HDFC Silver ETF FoF Fund
Fund of Fund investing in HDFC Silver ETF
AUM: ₹5,811.22 Cr
Fund Inception Date: 28 October 2022
Minimum Investment: SIP: ₹100 & Lumpsum: ₹100
Exit Load: 1% for redemption within 15 days
Performance Snapshot:
| Period | Return (%) | Standard Deviation (%) |
| 1 Year | 160.27 | 47.72 |
| 3 Year | 54.04 | 36.01 |
Nippon India Silver ETF FoF
Nippon India Silver ETF FoF is backed by Nippon India ETF Silver BeES
AUM: ₹6,099.15 Cr
Fund Inception Date: 2 February 2022
Minimum Investment: SIP: ₹100 & Lumpsum: ₹100
Exit Load: 1% for redemption within 15 days
Performance Snapshot:
| Period | Return (%) | Standard Deviation (%) |
| 1 Year | 167.78 | 53.47 |
| 3 Year | 54.36 | 38.96 |
ICICI Prudential Silver ETF FoF
ICICI Prudential Silver ETF FoF invests in ICICI Silver ETF
AUM: ₹8,162 Cr
Fund Inception Date: 1 February 2022
Minimum Investment: SIP: ₹100 & Lumpsum: ₹100
Exit Load: 1% for redemption within 15 days
Performance Snapshot:
| Period | Return (%) | Standard Deviation (%) |
| 1 Year | 167.10 | 43.77 |
| 3 Year | 54.22 | 33.82 |
Aditya Birla Sun Life Silver ETF FoF Fund
FoF investing in ABSL Silver ETF
AUM: ₹1,724 Cr
Fund Inception Date: 2 February 2022
Minimum Investment: SIP: ₹100 & Lumpsum: ₹100
Exit Load: 0.5% for redemption within 30 days
Performance Snapshot:
| Period | Return (%) | Standard Deviation (%) |
| 1 Year | 167.23 | 45.07 |
| 3 Year | 54.11 | 34.34 |
Axis Silver FoF Fund
FoF investing in units of Axis Silver ETF
AUM: ₹1,442 Cr
Fund Inception Date: 21 September 2022
Minimum Investment: SIP: ₹100 & Lumpsum: ₹5000
Exit Load: 0.25% for redemption within 7 days
Performance Snapshot:
| Period | Return (%) | Standard Deviation (%) |
| 1 Year | 166.64 | 44.82 |
| 3 Year | 54.46 | 34.03 |
Risks of Investing in Silver Mutual Funds
Even the best silver mutual funds carry risk. Silver remains a volatile commodity, even more so than gold.
Key risks include:
- High price volatility: Silver is significantly more volatile than gold. While gold often behaves like a defensive asset, silver reacts strongly to both industrial demand expectations and macroeconomic sentiment. In bull phases, silver can rise much faster than gold. However, the opposite is also true. During corrections, silver often falls harder and faster. Double-digit percentage swings within months are not unusual.
- No income generation: Unlike dividend-paying stocks or interest-bearing bonds, silver does not generate any cash flow. When you invest in silver mutual funds, you rely entirely on price appreciation for returns. There are:
- No dividends
- No interest payouts
- No earnings growth
This makes silver a non-productive asset. That is why, despite its recent outperformance, silver should act as a diversification tool, not a core growth engine.
- Commodity cycle risk: Silver follows long commodity cycles. These cycles depend on:
- Global industrial production
- Infrastructure spending
- Energy transition momentum
- Inflation trends
- US dollar strength
During strong economic expansions, industrial demand can drive silver prices higher. But during global slowdowns or recessions, demand contracts and prices can correct sharply. Commodity cycles can last several years. Investors who enter near cycle peaks may face prolonged periods of weak performance.
- Currency fluctuations: Silver prices in India depend on two variables – international silver prices (usually quoted in USD) and USD/INR exchange rate. Even if global silver prices remain stable, a strengthening rupee can reduce domestic returns. Conversely, rupee depreciation can amplify gains. This adds a currency layer to your investment, which increases unpredictability. A mutual fund advisor can explain this dual exposure clearly before recommending allocation.
- Short-term drawdowns during global slowdown: Silver often behaves like a hybrid asset – part precious metal, part industrial commodity. During “risk-off” phases or global economic slowdowns, investors tend to liquidate industrial commodities. Since silver has strong industrial use, it may decline alongside base metals. In sharp global sell-offs, silver can experience steep short-term drawdowns. Even the best silver mutual funds cannot protect you from such macro-driven corrections because they simply track the underlying commodity.
These risks do not mean you should avoid silver altogether. They simply mean you must:
- Keep allocation limited
- Avoid emotional entry during price spikes
- Think in terms of cycles, not weeks
- Combine silver with equity and debt for balance
Silver can enhance diversification, but only when used with discipline.
Who Should Invest in the Silver Mutual Funds?
Silver funds do not suit every investor. They work best as a satellite allocation. You should consider investing if you:
- Want diversification beyond equity and debt
- Believe industrial demand will drive silver higher
- Have moderate to high risk tolerance
- Understand commodity cycles
- Already hold core equity and debt exposure
The best silver mutual funds serve as portfolio diversifiers rather than core holdings.
How Much Silver Should You Hold?
Asset allocation matters more than picking the fund itself. And even a strong asset fails to add value if you overweight or underweight it in your portfolio. Generally, mutual fund advisors approach silver allocation as such:
5–10% allocation for conservative investors: This range gives you diversification and some inflation cushioning without significantly increasing portfolio volatility. At this level, silver supports stability rather than driving returns.
10–15% for investors focused on diversification: If your goal is a broader asset balance, you may consider a slightly higher allocation. In this range, silver plays a visible diversification role while still remaining within disciplined limits.
Above 15% only for experienced commodity investors: Larger exposure demands emotional resilience and a solid understanding of commodity cycles. Without experience, higher allocations can amplify anxiety during sharp corrections.
Before increasing your silver allocation meaningfully, speak with a mutual fund consultant to ensure the exposure fits your long-term financial plan.
Conclusion
Silver offers a unique mix of industrial relevance and precious metal appeal, making it an interesting diversification tool in 2026. The best silver mutual funds provide a convenient and regulated way to gain exposure without the challenges of holding physical silver. However, investors should approach silver with discipline, realistic expectations, and controlled allocation. Used wisely, it can strengthen portfolio resilience, but it should complement your strategy, not dominate it.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any mutual fund. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
