The same rules apply with regard to silver ETFs as they do with gold. If you don’t want to carry physical bullion stock or don’t see your purchase as a long term play, you might be better served investing in a silver exchange traded fund instead.
The main markets for exchange traded funds are the London Bullion Market, New York Mercantile Exchange, Tokyo Commodity Exchange and the Australian Securities Exchange.
Many investors tend to view silver exchange traded funds more as a useful trading vehicle than a medium for making a long term investment in the metal
How the ETF market works is the value of an exchange traded fund is based on the current spot price of silver, which is the value of one troy ounce of 99.9% pure silver at the point in time of the trade.
Buying silver through an ETF offers a cost saving in comparison to the associated costs of buying physical silver and there is a lower premium on your investment overall together with the fact that you don’t have to pay or arrange for storage of the silver, as is the case with gold too.
The most obvious drawback to trading a silver ETF is that you own a share of a trust in the fund you invested in and never actually own any physical silver directly. Shares you hold in a silver ETF is only able to be exchanged for cash and you do have to be wary of liquidity levels with some traded ETFs.
It is worth mentioning that some investors have started to take the view that silver can be a leveraged play of gold, as silver prices in the last 15 years have outshone gold by a multiple of nearly 1.5 on average.
Geopolitical tensions and the impending raising of interest rates by the FED are two factors that are encouraging some investors to look at silver and gold ETF’s as a safe haven tactic, instead of the old way of actually buying bullion.
Top-Rated Silver ETFs
- UltraShort Silver
2. VelocityShares 3x Inverse Silver ETN
3. X-Links Silver Shares Covered Call ETN
4. Physical Silver Shares
5. Silver Trust
6. DB Silver Fund
7. E-TRACS UBS Bloomberg CMCI Silver ETN
8. Ultra Silver
9. VelocityShares 3x Long Silver ETN