Spurred by moves in the gold market as well as increasing demand from industrial sectors, silver saw strong price movements in the first half of 2024, breaching US$30 per ounce for the first time in more than a decade.
While silver has often been seen as a more approachable precious metal owing to its lower per ounce price, its performance has lagged gains seen in the gold price over the past few years. However, silver did join gold in its rally earlier this year, climbing above US$32 in May, and pulled above US$30 again in July.
Like gold, investors can gain exposure to silver in several ways that each offer their own pros and cons, along with differing costs and risks. For example, investors can purchase physical silver bars or coins, or invest in silver futures.
Another way for investors to diversify their portfolio with silver is to invest in exchange traded funds (ETFs). These products work similarly to mutual funds in that they pool investor resources into an asset. However, as their name suggested, ETFs are traded on exchanges like stocks, making them more accessible to investors.
While ETFs aren’t without risk, they can offer a more stable investment compared to individual stocks thanks to their diversification and the fact that they are often managed and rebalanced.
Silver ETFs come in several forms, such as ones that hold physical silver and ones that hold silver mining, royalty and exploration stocks. Investors looking to start trading silver ETFs should be aware of the options available to them.
In order to determine which silver ETF will best suit their precious metals needs, investors should examine the options available to them. Here’s a brief look at seven of the top silver ETFs by total assets. The first four ETFs track the price of silver, while the last three provide exposure to silver-mining stocks.
Assets and prices for these silver ETFs were collected on September 10, 2024, using data from ETF Database, and performance data is accurate for the end of Q2 2024.
Silver price ETFs
1. iShares Silver Trust (ARCA:SLV)
Company Profile
Total assets: US$13.01 billion; unit price: US$25.66
As the iShares Silver Trust’s website warns, it is not your standard ETF. Why? Put simply, the iShares Silver Trust is not an investment company registered under the Investment Company Act of 1940, or a commodity pool under the Commodity Exchange Act. Further, its ETF shares aren’t subject to the regulatory requirements that apply to mutual funds.
Investors who are not put off by those conditions may find the iShares Silver Trust appealing. It uses the London Bullion Market Association silver price as its benchmark and holds silver bullion — 465.55 million ounces as of the date noted above, to be exact. The trust has a five year total return of 13.49 percent.
2. Aberdeen Standard Physical Silver Shares ETF (ARCA:SIVR)
Company Profile
Total assets: US$1.34 billion; unit price: US$27.06
The Aberdeen Standard Physical Silver Shares ETF is also not a typical ETF and is very similar to the iShares Silver Trust. The investment objective of the Aberdeen Standard Physical Silver Shares ETF is for its shares to reflect the performance of the silver price less the expenses of the trust’s operations.
The fund is backed with 45.51 million ounces of silver held with JPMorgan Chase Bank in London in a secured vault. This ETF reportedly has a good record for correctly tracking the spot price of silver. Its five year average annual return comes in at 13.71 percent.
3. ProShares Ultra Silver ETF (ARCA:AGQ)
Company Profile
Total assets: US$570.83 million; unit price: US$33.80
Set up in December 2008 by ProShares, the ProShares Ultra Silver ETF was designed to offer daily investment results, that correspond with twice the daily performance of the Bloomberg Silver Subindex.
The fund uses derivatives such as futures contracts to invest in silver. ETF Database suggests it may be ‘a powerful tool for investors with a bullish short-term outlook for silver.’ While designed for short term investment, its total five year return stands at 8.74 percent.
4. ProShares UltraShort Silver ETF (ARCA:ZSL)
Company Profile
Total assets: US$76.2 million; unit price: US$11.64
Alongside the creation of the ProShares Ultra Silver ETF in late 2008, ProShares launched its UltraShort Silver ETF. This fund was designed to provide investors with a hedge against declines in the silver market.
Because the fund is built around providing results at a negative two times daily performance of the Bloomberg Silver Subindex, it is meant for traders who have a high capacity for risk and who are willing to monitor their positions on a daily basis.
This high-volatility fund provides exposure to the silver futures market and has a five year return of -40.56 percent.
Silver mining ETFs
1. Global X Silver Miners ETF (ARCA:SIL)
Company Profile
Total assets: US$1.02 billion; unit price: US$30.44
The Global X Silver Miners ETF gives investors access to a basket of silver-mining stocks. The ETF benefits from the fact that those companies can enjoy quick gains when the price of the metal is rising. It also allows investors to avoid the risks associated with individual companies and lets them add geographical diversity to their portfolios.
This ETF has an expense ratio of 0.65 percent, and its top holdings include streaming company Wheaton Precious Metals (TSX:WPM,NYSE:WPM) at a weight of 25.94 percent, Pan American Silver (TSX:PAAS,NASDAQ:PAAS) at a weight of 14.06 percent and Korea Zinc Company (KRX:010130) at 5.49 percent.
The five year average annualized return for the fund is 4.3 percent.
2. Amplify Junior Silver ETF (ARCA:SILJ)
Company Profile
Total assets: US$875.89 million; unit price: US$10.96
The Amplify Prime Junior Silver ETF bills itself as the ‘first and only ETF to target small cap silver miners.’ The index provides a benchmark for investors to track public small-cap companies in the silver space.
The ETF has an expense ratio of 0.69 percent and its holdings span Canada, the US and the UK, with key silver companies such as Pan American Silver at a weight of 8.95 percent, Harmony Gold Mining (NYSE:HMY) at 7.92 percent and Coeur Mining (NYSE:CDE) at 7.16 percent.
Over the last five years the fund has provided investors with a return of 2.62 percent.
3. iShares MSCI Global Silver Miners ETF (BATS:SLVP)
Company Profile
Total assets: US$213.67 million; unit price: US$11.52
The iShares MSCI Global Silver Miners ETF tracks an index composed of global equities of companies primarily engaged in silver exploration or metals mining; however, it skews toward Canadian mining stocks. The ETF has the lowest expense ratio of the three ETFs focused on silver stocks at 0.39 percent.
Holdings for the iShares MSCI Global Silver Miners ETF include Pan American Silver at a weight of 21.69 percent, Hecla Mining (NYSE:HL) at 9.66 percent and Newmont (TSX:NGT,NYSE:NEM) at 7.51 percent.
The five year total return for the fund is 5.94 percent.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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