benefits of investing in commodities
TRANSCRIPT
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BENEFITS OF INVESTING IN COMMODITIES
Aim to Hedge
against InflationCommodities can act as a hedge against inflation as their prices are highly linked to
general price levels in the economy.
DiversificationCommodities provide diversification to a portfolio as their price movements are less
correlated to equities
Trading Flexibility Ease of trading through stock exchanges & are highly liquid in nature
Store of Value
Risk of
Downgrade
Precious commodities enable investors to park their excess funds safely for long
periods of time
Silver has no risk of price reduction due to downgrades as its creditworthiness is not
evaluated by rating agencies
NO RISK
The above factors are not exhaustive
3
The above factors are not exhaustive. Data for the year 2020. Source: Global Newswire, Conversion 1 KG = 35.274 Ounce and 1 KG of Silver
on 31st December 2020 = ` 68,105
Silver-intensive future that lies ahead
VARIED APPLICATIONS OF SILVER
Renewable Energy Jewelry
Industrials & Electronics Investment
`
Consumption of Silver Renewable Energy Industrials and Electronics Jewellery Investment
Million Ounces (approx.) 101 413.4 181.2 200.5
Value( `. in crs) (approx.) 19,500 79,816 34,985 38,711
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WHAT DRIVES VALUE OF SILVER?
ECONOMIC
OUTLOOK
During uncertain
times the
investments in
silver demand
increases
INDUSTRIAL
OUTPUT
Silver is widely
used in specialist
electronics, where
cost allows, as it is
an excellent
conductor of
electricity – better,
even, than copper.
SUPPLY AND
DEMAND
Supply of silver
fluctuates in tandem
with demand for
other resources such
as copper, gold and
zinc whereas demand
is heavily influenced
by the industrial
manufacturing
outlook.
INFLATION
The silver price
history shows that
in times of
increasing
inflation, the
commodity
increases in value.
INTEREST RATES
Interest rates
reduction plays a
role in inflation
thereby increasing
attractiveness of
silver while
decreasing the
attraction of other
asset classes
The above factors are not exhaustive
5Data as on 31st December 2021. Source: Silver Institute and Motilal Oswal.
INDUSTRIAL DEMAND FOR SILVER
Industrial Demand for Silver as a proportion of Total Demand
has increased due to its increasing application in modern
environmental friendly manufacturing
Consumption of Silver is highest for electronic mobility and
appliances indicating increased future demand as more
renewable energy and mobility solutions are adopted
0
50
100
150
200
250
300
350
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onic
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ctr
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ate
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Photo
gra
phy
Oth
er
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ustr
ial
Jew
elr
y
Inve
stm
en
t
400
420
440
460
480
500
520
540
800
850
900
950
1000
1050
1100
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F
Total Demand Industrial
Total Demand v/s Industrial Demand Silver Demand by Market Segment (Moz)
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POTENTIAL HEDGE AGAINST INFLATION
Source: Edelweiss Research. Past performance may or may not be sustained in future.
During inflation, the huge demand in precious metal tends to outstrip the supply
8.007.507.006.506.005.505.004.504.003.503.002.502.001.501.000.50
200000
185000
170000
155000
140000
125000
110000
95000
80000
Feb
/18
Apr/
18
Jun
/18
Aug
/18
Oct/
18
De
c/1
8
Feb/1
9
Ap
r/1
9
Ju
n/1
9
Aug
/19
Oct/
19
De
c/1
9
Fe
b/2
0
Ap
r/2
0
Ju
n/2
0
Aug
/20
Oct/
20
De
c/2
0
Fe
b/2
1
Ap
r/2
1
Ju
n/2
1
Aug
/21
Oct/
21
Silver Price Inflation
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GOLD - SILVER RATIO
Source: Edelweiss Research. Past performance may or may not be sustained in future.
Gold-Silver ratio : It is the quantity of silver in ounces needed to buy a single ounce of gold. Higher ratios are often
associated with economic recessions, when weaker industrial demand has a greater impact on the silver market and
so the current valuation is more consistent with economic expansion.
INTRODUCING
THE FIRST SILVER ETF
IN INDIA
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ABOUT ICICI PRUDENTIAL SILVER ETF
The actual allocation shall be as per the SID of the Scheme.
The investment
objective of the Scheme
to generate returns that
are in line with the
performance of physical
silver in domestic prices
as derived from the
LBMA AM fixing prices
The scheme will invest
its proceeds in
Physical Silver and
silver related
instruments
Unlike holding Physical
Silver, an investor can
benefit from investing
in Silver ETFs as it
provides more liquidity
and less storage costs
10
PERFORMANCE OF SILVER
Source: Edelweiss Research. Past performance may or may not be sustained in future.
Silver has delivered approx. 63% absolute returns in last ~ 4 years
200000
190000
180000
170000
160000
150000
140000
130000
120000
110000
100000
90000
80000
Feb
18
Apr18
Ju
n 1
8
Aug
18
Oct
18
Dec
18
Feb
19
Apr19
Ju
n19
Aug
19
Oct
19
Dec
19
Feb
20
Apr20
Ju
n20
Aug
20
Oct
20
Dec
20
Feb
21
Apr21
Ju
n21
Aug
21
Oct
21
Dec
21
`.158781
11
Source MFIE, Edelweiss. Past performance may or may not be sustained in the future. The Total Return Variant of the Index has been used. The
performance figures pertain to the Index and do not in any manner indicate the returns/performance of the Scheme.
RESISTANCE OF SILVER
Silver has delivered better returns compared to Nifty 50 TRI,
during last 3 key global events
Crisis Period Silver Nifty 50 TRI
Subprime Mortgage 1st Jan 2008 to 27th Feb 2009 13.08% -54.43%
Taper Tantrum 1st Jan 2013 to 30th Aug 2013 -6.07% -7.15%
Covid-19 19th Feb 2020 to 23rd Mar 2020 -22.62% -37.09%
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WHY INVEST IN ICICI PRUDENTIAL SILVER ETF?
Silver is a tangible
asset. It has a diverse array
of applications.
Investor need not worry
about purity or qualityInvesting in silver is prudent
investment during crisis
Act as potential
Hedge against
inflation
Holding the commodity in
form of ETFs provides the
investor higher liquidity
Diversifying portfolio with
silver can reduce overall
portfoilio risk
Silver ETF enables
investing in silver
without storage costs
Majority of silver is
consumed and not available
for recycling.
Silver is used for
Solar panels, medical
instruments, switches,
satellites etc
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INVESTMENT APPROACH: ICICI PRUDENTIAL SILVER ETF
SECONDARY MARKET
SELLERAMC
BUYER
Silver ETFCASH
BUY/SELL
Silver ETFCASH
NATIONAL STOCK
EXCHANGE (NSE)
PRIMARY MARKET
FUND
AUTHORIZED
PARTICIPANTMARKET M AKING/ ARBITRAGE
CREATION IN-KIND
(PHYSICAL SILVER)
REDEMPTION IN-KIND
(PHYSICALSILVER)
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ICICI PRUDENTIAL SILVER ETF
Type of Scheme An open-ended scheme replicating/tracking Domestic Price of Silver.
Plans/ Options Currently there are no plans/ options under the scheme
NFO Period January 05, 2022 to January 19, 2022
Fund Manager Details Gaurav Chikane
Minimum Application Amount During NFO: Rs. 100/- ( plus in multiple of Re. 1)
During Ongoing Offer Period:
On Stock Exchanges – Investors can buy/ sell units of the scheme in round lot of 1 unit and in multiples there of
Directly with the Mutual Fund –Authorized Participant(s)/ Investor(s) can buy/ sell units of the scheme in
Creation Unit Size viz. 30,000 units and in multiples there of
Exit Load Nil
Benchmark Index Domestic price of silver as derived from the LBMA prices.
MICR Cheques/ RTGS
Transfer Cheques
and MICR cheques will be accepted till the end of business hours upto January 14, 2022
Transfer cheques and Real Time Gross Settlement (RTGS) request will be accepted till the end of
business hours upto January 19, 2022
Switches Not Applicable
Liquidity Units are listed on Stock Exchange
15
RISKOMETER
The Product labeling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the
same may vary post NFO when actual investments are made.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Disclaimer: All figures and data given in the document are dated unless stated otherwise. In the preparation of the material contained in this document, the AMC has used information that is publicly available, including
information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC
and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any
information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such
expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect
to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies
of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc.
The AMC (including its affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect,
punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on this
material. Investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of ICICI Prudential Mutual
Fund.
ICICI ETF is part of ICICI Prudential Mutual Fund and is used for exchange traded funds managed by ICICI Prudential Asset Management Company Limited.
Riskometer as on 30th November 2021
ICICI PRUDENTIAL SILVER ETFSCHEME RISKOMETER
(An open-ended scheme replicating/tracking Domestic Price of Silver):*
Investment returns that closely track domestic prices of Silver, subject to tracking
error.
Aiming for diversification of investment portfolio.
*Investors should consult their financial advisers if in doubt about whether the
product is suitable for them.Investors understand that their
principal will be at Moderately High
risk
16
DISCLAIMERS
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Disclaimer: All figures and data given in the document are dated unless stated otherwise. In the preparation of the material contained in this document, the AMC has used information that is publicly available,
including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made
available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and
/ or completeness of any information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar
expressions or variations of such expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties
associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services
and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc.
The AMC (including its affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect,
punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on
this material. Investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of ICICI Prudential
Mutual Fund.
Disclaimer of National Stock Exchange of India Limited: “As required, a copy of this Scheme Information Document has been submitted to National Stock Exchange of India Limited (hereinafter referred to as NSE).
NSE has given vide its letter NSE/LIST/5280 dated March 04, 2021 permission to the Mutual Fund to use the Exchange's name in this Scheme Information Document as one of the stock exchanges on which the
Mutual Fund's units are proposed to be listed subject to, the Mutual Fund fulfilling various criteria for listing. The Exchange has scrutinized this Scheme Information Document for its limited internal purpose of
deciding on the matter of granting the aforesaid permission to the Mutual Fund. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the
Scheme Information Document has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Scheme Information
Document; nor does it warrant that the Mutual Fund's units will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of the Mutual Fund, its
sponsors, its management or any scheme of the Mutual Fund. Every person who desires to apply for or otherwise acquire any units of the Mutual Fund may do so pursuant to independent inquiry, investigation and
analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription /acquisition whether by
reason of anything stated or omitted to be stated herein or any other reason whatsoever.”
Disclaimer of BSE Limited: It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the SID has been cleared or approved by BSE Limited nor
does it certify the correctness or completeness of any of the contents of the SID. The investors are advised to refer to the SID for the full text of the Disclaimer clause of the BSE Limited”
.