Silver exchange-traded funds (ETFs) provide an easy, cost-effective, and lower-risk way of playing the price of silver without needing to store physical bars, according to Sizemore. Furthermore, these ETFs typically provide greater diversification compared with owning physical silver.
Sizemore notes that while SLVP is less risky than many silver mining companies, its exposure to the price of gold remains intact and commodity ETFs like this one are usually taxed as collectibles in many accounts.
iShares Silver Trust
The iShares Silver Trust provides exposure to the price of silver. Shares represent fractional undivided beneficial interests in its net assets – which consist of silver held by its custodian. However, their market price on American Stock Exchange may differ from their net asset value per share and brokerage commissions and expenses may reduce returns.
This fund utilizes a physical-backed methodology, eliminating futures contract risks while offering investors more accurate pricing of metal held within. Furthermore, this low-cost ETF offers investors more realistic pricing of metal holdings in its inventory.
SLV, as the largest and oldest silver ETF, provides an easy way to diversify your portfolio. However, this fund is top-heavy; more than half its assets are allocated to its largest holdings. If you prefer more concentrated exposure to silver miners instead, Global X Silver Miners ETF (SIL) might provide better exposure; its fluctuation makes it an effective hedge when its parent metal changes direction.
Global X Silver Miners ETF
Silver has long been recognized as an attractive industrial commodity and component of many consumer products. With its lower per-ounce price and volatility attracting trend-following speculators and investors alike, silver often sees more interest from traders during bull markets than gold does. Silver ETFs provide an easy and affordable way to gain exposure without needing to hold physical precious metals or engage in leveraged plays on commodity prices directly.
Global X Silver Miners ETF provides investors with passive exposure to global silver mining companies’ performance. It aims to match generally to price and yield performance before fees and expenses of Solactive Global Silver Miners Total Return v2 Index.
The ETF invests nearly 80% of its assets in securities from its underlying index, with a portfolio turnover rate that is lower than average for Equity Precious Metals category – this may help minimize costs and taxes associated with realized returns.
ETFMG Prime Junior Silver Miners Fund
Silver is an industrial metal that also serves as a store of value, produced through mining other metals such as gold and copper. Given this fact, investing in silver miner ETFs offers an effective means of exposure to this metal.
The Fund aspires to achieve investment results that, before fees and expenses, correspond generally with the price and yield performance of the Prime Junior Silver Miners & Explorers Index. This index comprises public small-cap companies active in silver exploration and production industries; both pure-play companies that derive 50% or more of their revenues from exploration/production of silver, as well as non-pure play companies make up this index.
Investment in the Fund entails risks, including potential loss of principal. Investments made in the Fund at market prices may differ from its Net Asset Value (NAV). Furthermore, the Advisor may make markets in Shares of the Fund at any time – including when NAV is unavailable – subject to regulatory approval.
Wheaton Precious Metals ETF
Wheaton Precious Metals Corporation (WPM) stands out among precious metals streaming and royalty companies as one of the best. Though not known for having Midas touch, their business model should help the company deliver tremendous shareholder value both now and into the future.
Starting from its low dividend payout ratio of only 0.51%, which indicates that it retains much of its earnings for growth and unexpected downturns, this company’s profitability has long exceeded industry averages.
Miners who collaborate with Royal Gold or Franco-Nevada companies benefit greatly, as this means they no longer need to sell stock or issue debt in order to raise capital to build and expand mines. Instead, the companies provide cash upfront so the miners can buy cheap precious metals which they then resell at higher prices once their mining process begins.
