Over the years, Silver has been nicknamed the “Poor man’s gold” as it gives access to a precious metal at a considerably less price than gold. ETFs or Exchange-traded funds are a new class of financial products that aim to track an index, sector, or commodity and are tradable on stock exchanges. There are also Silver ETFs in existence, which offers a more affordable way to gain exposure to silver compared to owning the physical commodity. Here are some of the best silver ETFs you can look to invest in for 2021.
1. Aberdeen Standard Physical Silver Shares ETF (SIVR)
Aberdeen Standard Physical Silver Shares ETF (SIVR) is backed by physical silver bullion bars which are held in London vaults. It is a passively managed fund that has an annual expense ratio of 0.30 percent. The value of silver is based on an ounce of price as set by the London Bullion Market Association at approximately 12:00 noon – London.
2. Global X Silver Miners ETF (SIL)
Global X Silver Miners ETF does not invest in silver but in companies that mine the metal. It has been in existence for more than a decade, holding more than 40 companies involved in mining silver worldwide. This is made up of both actual miners, as well as other companies that have streaming interests or hold royalty in mining operations. Its biggest holdings are Wheaton Precious Metals (WPM) which has streaming agreements for 20 operating mines and nine development-stage projects.
3. Invesco DB Silver Fund (DBS)
Invesco DB Silver Fund (DBS) is a commodity pool that combines investor contributions for trading futures and commodities markets. It tracks the DBIQ Optimum Yield Silver Index Excess Return. This ETF is suffer risks associated with contango and backwardation as it is exposed to futures contracts. It has a total of $23 million worth of assets under management, with holdings comprising only silver futures.
4. ETFMG Prime Junior Silver Miners ETFs(SILJ)
ETFMG Prime Junior Silver Miners ETFs(SILJ) exclusively targets only small-cap silver miners but also invests heavily in traditional silver miners such as First Majestic Silver and Pan American Silver. The fund’s modified free-float market-cap weighting makes the above-mentioned miners important in the fund, but it also tracks some small entities such as Kooteney Silver and Canada Silver Cobalt Works.
5. iShares Silver Trust (SLV)
iShares Silver Trust (SLV) tracks the performance of the LMBA silver price. It has a total asset valuation of over $14 billion. The main objectives of this fund are to provide diversification in one’s portfolio and protect it against inflation. The fund is administered by BlackRock and primarily consists of silver held by JPMorgan Chase (JPM), the custodian institution. While it does not buy or sell silver to take advantage of market-price swings, it sells silver from time to time to cover its operating expenses. Shares of SLV can be found on the New York Stock Exchange Arca.
6. ProShares Ultra Silver (AGQ)
ProShares Ultra Silver (AGQ) is a powerful investment tool for investors but only for those who have a high-risk tolerance. Those with low-risk tolerance or a buy-and-hold strategy should avoid this ETF at all costs. The fund tries to meet its objectives by investing in any one of, or combinations of, Financial Instruments (including swap agreements, futures contracts, forward contracts, and options contracts) under normal market conditions.
There are three key considerations when one is acquiring silver ETFs: expense ratios, underlying assets, and daily average volume. The above-stated ETFs are some of the best in their categories, providing investors with a reliable way of gaining exposure to silver. These ETFs are also more diverse with ETFs focusing on miners, leveraged production as well as some inverse ETFs as well.