Kotak Mutual Fund Temporarily Halts Lumpsum Investments in Silver ETF Fund of Fund
Kotak Mutual Fund has announced a temporary suspension of lumpsum and switch-in investments in its Kotak Silver ETF Fund of Fund, effective October 10, 2025. The move follows a sharp surge in domestic silver premiums compared to international prices, a situation attributed to severe scarcity in India’s physical silver market. However, the fund house clarified that existing Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP) investments will continue as usual.
According to Kotak Mutual Fund, domestic silver premiums have spiked from around 0.5 per cent in early September 2025 to 5.7 per cent as of October 9, 2025, briefly touching an intraday peak of 12 per cent. The current market reflects a buying premium of roughly 10 per cent and a selling premium near 3 per cent, underscoring the imbalance caused by supply constraints. The fund expects this shortage to persist until the end of October.
Emphasising that the decision is a protective measure rather than a negative outlook on silver, Kotak Mutual Fund maintained a positive long-term stance on the metal. The suspension, it said, aims to safeguard investors from entering at inflated domestic premiums and will be lifted once market conditions stabilise.
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