Silver Exchange Traded Funds

Investors can use exchange traded funds (ETF’s) to hedge exposure or for speculation. Easily traded on a stock exchange, ETF’s can be bought and sold just like shares of traditional companies. However, because they themselves invest in underlying assets, certain ETF’s can be bought to speculate on a fall in the price of silver. Different silver ETF’s allow exposure to different forms of gold.

Silver ETF’s that hold solver products

Such ETF’s invest in products such as gold bullion, and hold the physical product under the umbrella of the trust. They allow an investor to participate in the movement of the silver price, without the need to individually buy and store physical gold.

One such fund is the iShares Silver Trust Fund. It was created in April 2006, and currently holds around $9.75 billion of assets (net). It pays no dividend, its price fully reflecting the net value of its assets. The investment strategy of the fund is to replicate the daily price movement of the price of silver owned by the trust. A great ETF for those the investors seeking a direct route to the value of silver.
Gold ETFs that hold Gold Futures

This sort of ETF seeks to replicate the performance of silver through holding gold derivatives such as futures and options. The expenses associated with such funds are usually lower than for those that hold physical gold.

The PowerShares DB Silver Fund is a fund designed to track the performance of the Deutsche Bank Liquidity Commodity Index, Optimum Yield Gold Excess Return. This index is composed of futures contracts on silver. The PowerShares DB Silver Fund was created in January 2007, and has a net asset value of around $80 million.

ETFs that follow the Silver Industry

These ETFs consist of companies that operate within the silver industry. They are similar to sector ETFs, and will track baskets of companies that rely on gold as a core business.

One such fund is the Silver Miners ETF from Global Funds. This fund invests in the securities of a range of silver miners from around the world, from Canada and the USA to South America and Russia.

Multiple Metals ETFs

Many investors want exposure to more precious metals than silver alone. There are ETFs that cater for such investors, and include multiple metal products.

PowerShares DB Precious Metals Fund is one such fund. It seeks to track the performance of the Deutsche Bank Liquid Commodity Index – Optimum Yield Precious Metals Excess Return. This index is composed of futures contracts on gold and silver, and is intended to replicate the performance of the precious metals sector. The fund was created in January 2007, and has net assets of $694.62 million.
ETFs that short silver

For those investors that feel the silver price will fall, or for those that have a long position and want to hedge against a fall in the silver price, short silver ETFs are constructed to give exposure to the downside. If the price of silver falls, the price of a short silver ETF will rise.

ProShares UltraShort Silver ETF is an investment that aims to return twice the opposite performance of gold bullion on a daily basis (before fees and expenses). In other words, when the silver price rises, the price of this fund will fall by twice the rate, and vice versa. It invests in a combination of swaps, futures, and options. It was created in December 2008.

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Silver Exchange Traded Funds


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