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.
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