Benchmark Asset plans India's first silver ETF

MUMBAI, July 22 (Reuters) - Benchmark Asset Management plans to launch India's first exchange traded fund (ETF) tracking silver as part of a strategy to expand its bouquet of passively managed funds, a top executive said on Tuesday.

The fund will invest in international silver-backed ETFs, Executive Director Rajan Mehta said.

Indian regulations restrict mutual funds from investing in commodities other than gold. But they can invest in global funds tracking any commodity, a path that Benchmark hopes to follow.

The fund house filed initial papers with the Securities and Exchange Board of India to launch Silver Benchmark Exchange Traded Scheme which will invest at least 90 percent of its assets in units of overseas mutual funds tracking silver.

"We want to increase bouquet of ETFs," said Mehta, whose other products include exchange traded funds as well as gold ETF, adding assets of ETFs were growing faster than other funds globally and he expected more Indians to invest in them.

In February, Benchmark sought regulator's nod to launch four fund of funds that would mainly invest in foreign exchange traded funds (ETFs) tracking clean energy, private equity, commodities and water indices.

ETFs, listed and traded like individual stocks giving investors access to the underlying securities without holding them, is a relatively new concept in India with market share of about 0.5 percent in the 5.2 trillion rupees funds industry. (Reporting by Nishant Kumar; editing by Ramya Venugopal)