About Silver Fund of Funds (FOF)
These mutual funds simply take your SIP money and passively buy their own company's Silver ETF. E.g., The ICICI Silver FOF merely buys the ICICI Silver ETF. This provides an avenue for investors who prefer traditional mutual fund apps like Coin, Groww, or bank apps to invest in silver directly with just their PAN card.
Silver MFs vs Silver ETFs
- Auto SIP: Mutual funds allow easy zero-maintenance monthly SIP auto-debits directly from your bank account. Doing this with an ETF on an exchange manually every month requires extreme discipline.
- Slightly Expensive: Because an FOF buys an ETF, you technically pay the minor expense ratio of the ETF *and* the minor expense ratio of the FOF, marginally eating into profits over decades.