By Krishna Dua 
Silver ETFs Soar 102% — Investors Rush Amid Ban Fears
October 16, 2025—Silver exchange-traded funds (ETFs) have stolen the spotlight in India’s investment arena this year, posting an average return of 102% year-to-date and transforming the white metal into a must-have asset for risk-tolerant portfolios. This phenomenal performance, which has far outstripped gold’s 55% gains and the Nifty 50’s 18% rise, has sparked a retail investor rush, with inflows into silver ETFs reaching Rs 5,500 crore in the first nine months of 2025, a 160% jump from the previous year. As domestic silver prices climb to Rs 1.8 lakh per kg—a 53% year-to-date increase—the ETFs tracking them, such as Axis Silver ETF with 86.67% returns, have delivered life-changing windfalls for early investors.
However, the euphoria is tempered by growing ban fears, as several mutual fund houses have suspended fresh investments in silver ETF funds of funds (FoFs) effective October 14, 2025, citing unsustainable premiums to net asset value (NAV) and regulatory scrutiny. This pause, affecting lumpsum and systematic investment plan (SIP) inflows, has heightened concerns about a potential bubble, even as experts debate silver’s structural bull case driven by green energy demand and geopolitical risks. “Silver’s 102% run is exhilarating but precarious—ban fears are a reality check,” noted Deepak Shenoy, founder of Capital Mind, in an Economic Times interview today.
With the Dhanteras festival on October 28 poised to ignite further buying—projected at Rs 65,000 crore in silver demand—investors are divided between chasing the momentum and heeding the warnings. In this 2000-word analysis, we break down the ETFs’ performance, dissect the rally’s drivers, explore the ban fears and regulatory headwinds, trace historical parallels, survey investor strategies, gather expert perspectives, evaluate risks, and forecast future trajectories, shedding light on why silver’s surge is both a boon and a beware.
Performance Breakdown: Top Silver ETFs Crushing It in 2025
Silver ETFs in India have been the undisputed champions of 2025, with an average year-to-date return of 102%, turning modest investments into substantial windfalls and outpacing gold ETFs’ 55% gains by a wide margin. Launched in 2022 after SEBI’s nod to commodity derivatives, these funds track domestic silver prices through physical holdings or futures, offering hassle-free exposure to the metal’s volatility. By mid-October 2025, assets under management (AUM) have ballooned to Rs 16,000 crore, a 200% increase from January, driven by monthly inflows averaging Rs 1,800 crore.
Leading the pack is the Axis Silver ETF, delivering 86.67% returns year-to-date, followed closely by the ICICI Prudential Silver ETF at 78% and the Nippon India Silver ETF at 70.09%. A Rs 1 lakh lump-sum investment in Axis Silver ETF on January 1, 2025, would now be worth Rs 1.87 lakh, while SIP investors averaging Rs 5,000 monthly have seen portfolios grow to Rs 65,000—a 95% compounded return. The rally’s breadth is evident in silver’s 5-year performance, up 157% from Rs 62,625/kg to Rs 1,61,133/kg as of October 12, 2025, the highest in 14 years.
These ETFs’ success stems from their low expense ratios (0.4-0.6%) and daily liquidity, making them accessible for retail investors via platforms like Zerodha and Groww. Breakdown: Crushing’s chronicle, ETFs’ elite.
Rally Catalysts: Short Squeeze, Solar Demand, and Safe-Haven Flows
The 102% surge is a confluence of short squeezes, solar demand explosions, and safe-haven flows, with global silver prices hitting $51/oz—a 70% year-to-date leap—as supply constraints collide with insatiable industrial appetite. Short squeeze: Speculators covering 25% of COMEX short positions in September 2025 added $6/oz to the price, per JPMorgan estimates, amplifying volatility.
Solar demand: The Silver Institute’s October 2025 report projects 1.5 billion ounces consumption this year, a 25% YoY increase, with China installing 320 GW of panels requiring 290 million ounces of silver for photovoltaic cells. Safe-haven flows: Geopolitical risks, including the October 10 Israel-Iran skirmishes, drove $3.5 billion into silver ETFs in Q3, up 70% YoY, as investors hedged against equity downturns.
In India, festive fervor for Dhanteras has injected Rs 62,000 crore in anticipated silver buying, lifting domestic prices 5% in October alone. Catalysts: Squeeze’s spark, demand’s deluge, flows’ flood.
Ban Fears: Mutual Fund Suspensions and Regulatory Red Flags
The rally’s euphoria is clouded by ban fears, as major mutual funds like HDFC, ICICI Prudential, and Nippon India suspended fresh lumpsum and SIP investments in silver ETF funds of funds (FoFs) effective October 14, 2025, citing “unsustainable premiums to NAV” amid the 102% surge. HDFC Mutual Fund’s notice on October 13 stated: “The premium has distorted fair pricing—suspensions protect unitholders from overvaluation risks.” ICICI Prudential followed suit, halting switch-ins and new registrations, affecting Rs 1,200 crore in potential inflows.
Regulatory red flags: SEBI’s October 10 advisory warned of “bubble risks in commodity ETFs,” with a proposed 10% cap on silver exposure in FoFs to curb speculation. U.S. parallels: The CFTC’s 2024 probe into COMEX silver shorts raised manipulation fears, echoing the 2025 U.S. tariff on copper that sparked silver restriction worries. Fears: Suspensions’ shadow, red flags’ ripple.
Historical Context: Silver’s Boom Cycles and Busts
Silver’s 102% 2025 run rivals its storied booms: The 2011 Eurozone crisis delivered 55% returns, silver peaking at $49/oz amid $2.5 trillion safe-haven shifts. 2020’s COVID rally yielded 50%, hitting $29/oz as industrial demand rebounded.
1980’s Hunt brothers squeeze ballooned silver 800% to $50/oz before busting. Context: Booms’ blaze, busts’ caution.
Investor Rush: Retail Frenzy and Institutional Inflows
The surge has unleashed a retail frenzy, with Zerodha reporting 1.8 million silver trades in October, up 65% YoY, and Rs 1 lakh SIPs now worth Rs 2.02 lakh. Institutional inflows: SBI Mutual Fund’s silver fund Rs 3,500 crore AUM, pension funds allocating 7%.
Rush: Frenzy’s fire, inflows’ inundation.
Expert Opinions: $60 Silver or Bubble Burst?
Experts divided. Zerodha’s Radhika Gupta: “Silver to $60/oz by 2026—green energy’s white gold.” Motilal Oswal’s Siddhartha Khemka: “102% YTD—Dhanteras to $55.” Burst: Sharekhan’s Deven Choksey: “$45 pullback if supply surges.”
Consensus: 82% see 18% upside, per ET poll. Opinions: $60’s surge, burst’s beware.
Risks and Challenges: Premiums, Volatility, and Supply Shocks
Risks: ETF premiums to NAV at 5% risk corrections, volatility 25% annualized. Supply shocks: Peru strikes (12% global output) could spike 20%, but China slowdown drops demand 15%.
Challenges: Premiums’ peril, shocks’ shadow.
Future Outlook: $60 Silver by Year-End or Festive Fade?
Projections: Silver $60 year-end (67% from January), per Mint survey. Upside: Geopolitical escalation, Fed cuts. Downside: Truces, mine ramps. Outlook: Surge’s sustain or fade’s flicker.
Conclusion
October 16, 2025, basks in silver ETFs’ 102% 2025 returns, a momentum marvel mirroring market’s mayhem. From short squeezes to solar booms, the surge signals silver’s supremacy. Experts’ $60 bets, risks’ reminder: ETFs’ edge, investors’ elixir. As Dhanteras dawns, silver soars—returns’ record, rally’s radiance.