3 silver ETFs in the fourth quarter of 2021

Silver exchange-traded funds (ETFs) closely track the price of silver and are usually more liquid than owning the precious metal itself. Like other precious metals, silver is often favored by investors seeking to hedge against inflation or as a safe haven in times of market turmoil. Silver ETFs usually adopt the structure of grantor trust, which is a typical fund structure, and its assets are a single commodity that is actually kept in a vault. This grantor trust structure means that each ownership of the ETF corresponds to a specific amount of underlying silver, which makes silver ETFs a convenient choice for investors who want to own physical gold bars without the hassle of insuring and storing metals themselves. Note that these ETFs hold silver or silver futures, not the stocks of companies that mine silver.

Key points

  • In the past year, the price of silver has lagged far behind the broader stock market.
  • The three silver ETFs are ranked according to a year’s tracked total return and are SIVR, SLV and DBS.
  • The only holdings of SIVR and SLV are silver, while the holdings of DBS consist entirely of silver futures.

The silver ETF field consists of 3 ETFs traded only in the United States, excluding leveraged ETFs. These ETFs trade commodity silver, not ETFs of silver mining companies. Silver’s performance in the past year has significantly lagged the market. As of August 30, 2021, the benchmark Bloomberg Silver Sub-Index provides a one-year tracking total return rate of -14.6%, compared with 31.1% for the Standard & Poor’s 500 Index. The best performing silver ETF is the Aberdeen Standard Physical Silver Shares ETF (SIVR). Below, let’s take a look at the best 3 silver ETFs, ranked by total return for a year. The following figures are as of August 30, 2021.

ETFs with very low assets under management (AUM) (less than US$50 million) are generally less liquid than large ETFs. This may result in higher transaction costs, thereby offsetting part of your investment income or increasing your losses.

  • Performance over one year: -12.9%
  • Expense rate: 0.30%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 488,746
  • Assets under management: US$967.6 million
  • Date of establishment: July 23, 2009
  • Publisher: Abrdn PLC

The structure of SIVR is a grantor trust, which is supported in kind by silver bars and coins held in the vault on behalf of investors. Its goal is to track the performance of silver prices minus trust operating expenses. Since it only holds physical silver, the fund does not use futures contracts. Like other silver ETFs, SIVR may be a useful safe haven during periods of market uncertainty, but as a long-term buy-and-hold investment, it may not be attractive. SIVR’s single holding is silver.

  • Performance over one year: -13.1%
  • Expense rate: 0.50%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 21,569,480
  • Assets under management: $12.9 billion
  • Date of Establishment: April 21, 2006
  • Issuer: Blackrock Financial Management

Like SIVR, SLV is a grantor trust that holds physical silver on behalf of investors. The trust provides investors with exposure to daily changes in silver prices. Since it does not use futures contracts, the fund is not affected by spot premiums or futures premiums. Like SIVR, it may be attractive to investors as a safe haven during market turmoil. SLV’s single holding is silver.

  • Performance over one year: -15.2%
  • Expense rate: 0.75%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 1,477
  • Assets under management: USD 23 million
  • Date of establishment: January 5, 2007
  • Issuer: Invesco

The structure of DBS Bank is a commodity pool, a private investment tool designed to combine investors’ contributions to futures and commodity market transactions. The fund tracks the excess returns of the DBIQ Optimum Yield Silver Index. This rule-based index aims to track the price of silver futures plus interest income held by the fund. Because of its exposure to futures contracts, DBS Bank faces risks associated with spot premiums and futures premiums. The fund only holds silver futures.

The comments, opinions and analysis expressed here are for reference only and should not be regarded as personal investment advice or advice on investing in any securities or adopting any investment strategy. Although we believe that the information provided here is reliable, we do not guarantee its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Due to the rapidly changing market and economic conditions, all comments, opinions and analyses contained in our content are presented on the date of publication and may change without notice. This material is not intended to provide a complete analysis of every important fact about any country, region, market, industry, investment or strategy.

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