UTI Mutual Fund Suspends New Investments in Silver ETF Fund Amid Market Volatility
UTI Mutual Fund has announced the suspension of fresh subscriptions to its UTI Silver ETF Fund of Fund, effective October 13, due to current market conditions and a surge in silver prices. The suspension affects lump sum and switch-in investments, while existing SIPs will continue. New SIP registrations are limited to ₹5 lakh per day. Redemptions remain fully operational. This decision follows a similar move by Kotak Mutual Fund, highlighting the volatility in the silver market.
*this image is generated using AI for illustrative purposes only.
UTI Mutual Fund has announced the suspension of fresh subscriptions to its UTI Silver ETF Fund of Fund, effective Monday, October 13. This decision comes in response to current market conditions, particularly the dramatic surge in silver prices.
Key Points of the Suspension
- Announcement Date: October 10
- Effective Date: October 13
- Last Processing Time: 3:00 PM on October 10
This marks the second such suspension in the silver fund category within a week, following a similar move by Kotak Mutual Fund.
Market Conditions Driving the Decision
The suspension comes amidst a significant rally in silver prices:
| Metric | Value | Change |
|---|---|---|
| Silver Price (Peak) | $51.30 | - |
| Domestic Indian Price | ₹1.63 lakh | 72% |
This price surge has led to an investor rush into silver ETFs, causing several schemes to trade at steep premiums to their indicative Net Asset Values (NAVs).
Impact on Investors
- New Investments: Lump sum and switch-in investments are blocked.
- Existing SIPs: Will continue uninterrupted.
- New SIP Registrations: Permitted up to ₹5 lakh per day from October 13.
- Redemptions: Remain fully operational.
Market Implications
The decision by UTI Mutual Fund, following Kotak Mutual Fund's similar action, highlights the volatility in the silver market. It also underscores the challenges fund houses face in managing precious metal-based funds during periods of extreme price movements.
Investors should remain vigilant and consider the potential risks associated with commodity-based funds, especially during times of high market volatility. As always, it's advisable to consult with a financial advisor before making investment decisions based on market movements.
17
