Gold and Silver in Indian Mutual Funds: FoFs, ETFs, and SGB Choices

Gold and silver exposure inside Indian mutual funds via a ETF FoF is sparking chatter. Some say about 10% of total exposure to commodities is a reasonable target, but the big question is how much to allocate and whether to chase silver's premium or tread carefully ^[1].

ETF FoFs vs ETFs: How they link Mutual funds offer commodity exposure without holding metal, using wrappers that bundle holdings. A typical setup is that a ICICI Gold FoF would invest in ICICI Gold ETF ^[3]. The idea is you get the bullion-linked exposure through a fund of funds, with the fees and tax treatment that come with the structure.

Silver ETF premiums: what to watch Silver ETFs have been trading at a notable premium, with reports around an 8% premium to the iNAV, creating potential arbitrage dynamics ^[2]. APs can gain when price mismatches persist, but the premium can bite if demand cools. There’s also a broader squeeze: lack of physical silver in India has pushed premiums higher, with UTI, Kotak, and SBI halting fund inflows into their silver ETF FoFs ^[2].

Sovereign Gold Bonds as an alternative Investors also point to Sovereign Gold Bonds as an alternative; several posts discuss them, and you can buy them like stocks, though some note new issues have been discontinued ^[4].

Bottom line: the gold-silver debate in Indian mutual funds is evolving—watch ETF vs FoF paths, silver premium dynamics, and SGB availability as the landscape shifts.

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