Silver ETF's are
a new investment vehicle that allow
investors to invest in silver without holding the metal or taking
positions in the derivatives markets such as futures or options. In the
past, investors have gained exposure to silver by investing in silver
stocks. Exchange traded funds comprise a replication of an index, a
group of sector or region constituent stocks or the physical holding of
an asset. Silver ETF's are traded on an exchange in much the same way
as stocks and can be bought, sold, used as a hedge or purchased on
margin. Unlike mutual funds, silver exchange traded funds do not
require the payment of an access or redemption fee. Silver ETF's are
cheaper to manage because they do not require excessive management fees
to facilitate the running of the fund. For the most part, transactions
for the fund are conducted periodically which reduces day to day costs.
The iShares Silver
Trust (SLV)
This iShare silver ETF seeks to replicate the price of silver owned by
the trust. This trust is not actively managed. Physical silver is held
on deposit.
PowerShares DB
Silver (DBS)
This fund seeks to track the Deutsche Bank Liquid Commodity Index
Optimum Yield Silver Excess Return which replicates the changes in the
market price of silver.
The Central Fund of
Canada (CEF) with trades on the
Canadian exchange is mandated to keep its core holdings in a mixture of
gold and silver. The fund has an appointed custodian that keeps the
reserves of gold and silver in inventory.
TFS Silver (SLVR)
Is designed to replicate and track the DJ-AIG Silver sub-index. This
silver exchange traded fund trades on the London Stock Exchange.
ETFS Physical
Silver (PHAG)
This is designed to track the movements in the spot price of Silver. It
is traded on the London Exchange. PHAG is backed by silver held by the
custodian HSBC bank.
Silver ETF's are a
useful addition to any traders and
investors trading arsenal. With the ability to go long, short or use as
part of sophisticated pair or hedging strategy, silver mining ETF's
provide versatility without encountering the same level of risk
associated with futures and options positions. Traders that want to
know more about Silver ETF's can do further research through the
numerous financial portal sites that grace the internet such as Yahoo,
Market Watch or the Wall Street Journal. You can also find up to date
articles and news on new silver based ETF products.