Silver is often seen as the poor relation in the precious metals’ family, perhaps that’s because of its relative abundance when compared to gold, platinum and palladium but in truth it's probably an undeserved reputation.

Where to buy, invest in and trade Silver ETFs

You can invest in exchange traded funds (ETFs) directly with the fund managers, as you would in a mutual fund but unlike a mutual fund, you can also buy and sell the ETFs as you would any other stocks and shares that is, through a stockbroker.

ETF managers hedge their exposure by tracking the performance of the underlying asset class. In the case of commodities such as Silver that means having exposure to physical bullion or derivatives, such as futures over the same. Though the exact nature of this hedge can vary from fund to fund. So it’s always worth doing your research and seeking appropriate advice before making an investment. The good news is, that as many ETFs and ETF like products were designed with retail investors in mind there is usually plenty of information about the funds and their holdings, fee structures etc. available online.

Stock brokers where you can buy and invest in Silver ETFs

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IG

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Account Fee: £0
Regular: £8
Discount: £3
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Hargreaves Lansdown

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Account Fee: £0
Regular: £11.95
Discount: £5.95
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Freetrade

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Account Fee: £0
Regular: £9.99 p/m
Discount: £0
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Saxo Capital Markets

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Account Fee: £0
Regular: 0.10%
Discount: 0.05%
US Shares: 2c per share
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AJ Bell

General Account:
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Account Fee: 0.25%
Regular: £9.95
Discount: £4.95
US Shares: £9.95
More Info
Capital at risk
Interactive Brokers

Interactive Brokers (IBKR)

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Account Fee: £0
Regular: 0.05%
Discount: 0.015%
US Shares: 0.035%
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Interactive Investor General Account:
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Account Fee: £9.99
Regular: £7.99
Discount: £3.99
US Shares: £4.99
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Fineco General Account:
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Account Fee: £0
Regular: £2.95
Discount: £2.95
US Shares: $3.95
Open Account

Silver may be the most common of the precious metals, but it is also the most versatile with many industrial, medical and scientific uses. The chart below records the consumption of silver in the USA between 2009 and 2019 in metric tons.

Source Statista.com

Jewelry was once the biggest use of silver but these days around 35% of silver consumed in the US is used in the electrical and electronics industry compared to just 6.0% that finds its way into jewelry.

Silver's physical and chemical properties make it ideal for use in electronics. For example silver paste is a key component in printed circuits that are used in RFID chips and tags, that allow modern supply and logistic chains to track goods from packaging, through to their end destination.

Like gold (which you can buy through Gold ETFs), silver is traded in troy ounces and is usually priced in US dollars. Silver prices peaked in early April 2011 at US$49.79 an ounce, and have been drifting lower ever since.

Though that downward move has been interspersed with counter trend rallies. Silver has, in the past enjoyed a correlation to gold and indeed the gold silver ratio was used by precious metal traders as a benchmark for the metal’s relative values.

However, that relationship has faded in recent times and the two metals are now able to move much more independently of each other and indeed other markets. For example, Silver has fallen by more than -27.0% in 2020 to date, at the time of writing, whilst gold is down by just -1.20% over the course of 2020 so far.

Given those sharp falls is it now time to be considering an investment in silver? And if so, through what vehicle or method?

There are too many variables and unanswered questions in the markets at the moment to try and time any investment sensibly. Probably the best advice is to wait until the price in a particular market or instrument tells us that it has finished falling or that the downtrend is set to continue.

One of the most convenient ways to trade or invest in silver is through a silver ETF

ETFs or Exchange traded funds, to give them their proper title, are open ended funds that aim to track and replicate the performance of an index, asset class or other benchmark. Unlike actively managed funds the ETF does not seek to outperform the underlying assets it tracks but rather it tries to mirror their returns regardless of whether they are positive or negative.

The open ended nature of these exchange traded funds means that their price is dependent on the performance of the instruments they track and not the supply and demand for units in the fund. The number of “units” in issue ebbs and flows with the amount of money that enters or leaves the fund, as such ETFs are said to be passive investments. ETFs have been increasing in popularity over the last fifteen years or so and they have moved well away from their equity index tracking roots, and there are now ETFs available for most strategies and asset classes.

ETFs were designed to allow those investors that didn’t have access to futures, options and derivative markets to be able trade in and gain exposure to equity indices and other products, like currencies, commodities and specialist investment strategies and factors such as growth and value.

Buying or selling ETFs

You can invest in ETFs directly with the fund managers, as you would in a mutual fund but unlike a mutual fund, you can also buy and sell the ETFs as you would any other stocks and shares that is, through a stockbroker.

ETF managers hedge their exposure by tracking the performance of the underlying asset class. In the case of commodities such as Silver that means having exposure to physical bullion or derivatives, such as futures over the same. Though the exact nature of this hedge can vary from fund to fund. So it’s always worth doing your research and seeking appropriate advice before making an investment. The good news is, that as many ETFs and ETF like products were designed with retail investors in mind there is usually plenty of information about the funds and their holdings, fee structures etc. available online.

What are the top ten most popular Silver ETFs?

The table below shows thirteen leading silver ETFS and ETNs and ranks them by AUM or assets under management, which is simply the amount of money invested in the ETF at a given point in time. The table also highlights metrics such as the fund's expense ratios (the cost of annual ownership) and the three-month total returns for each of these funds.   

Ticker

Fund Name

Issuer

AUM

Expense Ratio

3-Mo TR

SLV

iShares Silver Trust

Blackrock

$6.12B

0.50%

-7.76%

SIL

Global X Silver Miners ETF

Mirae Asset

$411.20M

0.66%

-26.57%

SIVR

Aberdeen Standard Physical Silver Shares ETF

Aberdeen Standard Investments

$389.87M

0.30%

-7.51%

USLV

VelocityShares 3X Long Silver ETN

Credit Suisse

$280.25M

1.65%

-27.73%

SILJ

ETFMG Prime Junior Silver Miners ETF

ETFMG

$107.49M

0.69%

-43.53%

SLVP

iShares MSCI Global Silver Miners ETF

Blackrock

$81.70M

0.39%

-26.43%

DSLV

VelocityShares 3X Inverse Silver ETN

Credit Suisse

$22.65M

1.65%

17.70%

SLVO

Credit Suisse X-Links Silver Shares Covered Call ETN

Credit Suisse

$18.57M

0.65%

-8.49%

DBS

Invesco DB Silver Fund

Invesco

$14.38M

0.79%

-8.06%

SBUG

iPath Silver ETN

Barclays Capital Inc.

$9.75M

0.40%

-8.36%

USV

ETRACS UBS Bloomberg CMCI Silver Total Return ETN

UBS

$3.10M

0.40%

-7.85%

ZSL

ProShares UltraShort Silver

ProShares

--

1.62%

13.40%

AGQ

ProShares Ultra Silver

ProShares

--

0.95%

-17.69%

How do Silver ETFs differ?

You will notice that some of these funds such as ticker SLVP above do not track silver itself but rather the companies that mine or produce it, As we noted in our recent article on Gold ETFs the share prices of mining companies don’t track the price of commodities in a linear fashion, because as businesses they are influenced by other factors, not just the price of their underlying product or commodities.

You can also see that some of the funds above are labelled as ETNs or Exchange Traded Notes; these are similar in nature to ETFs. However, ETNs allow for more exotic structures than vanilla ETFs.

For instance Ticker DSLV in the table above is the VelocityShares 3X Inverse Silver ETN.

This a three times leveraged vehicle whose price moves in the opposite direction to that of silver  such that a US$1.00 rise in the price of silver will mean a US$3.00 dollar (or equivalent) fall in the price of DSLV and vice versa.

Leveraged and inverse products such as these are designed for short term (intraday)speculation and trading and not for use in long term buy and hold investment strategies.

Make sure the Silver ETF product matches your plan

As with any investment or trading plan it’s important to be clear at the outset what you want to achieve through your investment or trade and to understand how the product that you invest or trade in can help you to meet that goal, or not as the case may be.

When investing in any ETF it’s also important to consider items such as liquidity by which we mean the ease of entering or exiting the fund. One way to get a handle on this is to look at the average volume traded in the ETFs under consideration. A general rule of thumb is that larger liquid issues are usually preferable to smaller funds with lower turnover.