Starting to invest in silver? A good tip for beginners is to start with the best silver ETFs. The best silver ETFs offer relatively high-risk diversification and have low costs. In this article, we share an overview of 5 of the best silver Exchange-Traded Funds. In addition, we share inspiration and tips on how and where to buy silver trackers. A good start is half the battle!
Why invest in silver?
For investors, silver is one of the most popular precious metals. Only gold ranks above silver. For beginners, the best gold ETFs may be of more interest. A good complement is one of the best silver ETFs. This combination is a valuable addition to a diversified investment portfolio.
The reason for investing in silver is because of diversification. Silver and gold often show lower or even negative correlations with equities and real estate investments. When equities fall, silver can rise in returns (and vice versa). Therefore, the best silver Exchange-Traded Funds are a great addition to a portfolio.
Other reasons why you want to invest in silver are:
- It can act as a hedge against inflation
- Silver is a relevant commodity for industrial growth
- It can act as a less volatile asset for long-term investors
Make sure your portfolio is diversified. This means several equity ETFs as well as the best value stocks, real estate funds or ETFs, REITs, and several other investments.
Learn more about investing in ETF and real estate investing.
5x Best Silver ETFs for long-term investing
With an estimated 1.74 million metric tons of Silver mined, Silver is one of the most popular precious metal investments. And one of the easiest ways to invest in Silver is through an exchange-traded fund (ETF). In exchange-traded funds, silver ETFs track silver prices minus expenses.
By investing in silver ETFs, investors can track Silver's price movements indirectly without holding the physical asset. Due to their accessibility and lower competition, silver ETFs can be easier for investors to manage than futures or other derivatives. You can select an ETF for Silver based on a number of factors, such as:
- Volatility: Before investing in an ETF, investors may review the returns for different periods, such as three, five, and ten years. In this list of 5x best silver efts, we have evaluated silver ETF performance based on 5-year returns.
- Expenses: The ETF with the lowest expense ratio generally outperforms those with a higher expense ratio when they track the same index or commodity. Below are silver ETFs with lower expenses than other silver-tracking ETFs.
- Objective: In order to make our list of the best silver ETFs, we only have picked ETFs that track silver prices or silver indexes. The following list excludes Silver ETFs with inverse objectives or leveraged strategies
Here are the 5 best Silver ETFs for the long term:
How do I buy the best Silver ETFs?
Do you want to buy one of the best silver ETFs? It is advisable to do so on an investment app or investment platform that has very low fees. The lower the transaction costs on each purchase, the higher the net return. In the long run, this can save hundreds or even thousands of euros in fees, depending on your deposit. This applies to any type of stock, REIT, or ETF, by the way.
These are some of the cheapest investment apps for buying the best Silver ETFs:
- Interactive Brokers
With some investment apps, it is even possible to buy silver ETFs commission-free. However, this depends on the situation. Besides fees, it is also important to look at the total range of stocks, bonds, and funds on offer. The more stock exchanges an investment app offers the more choice and opportunities for advanced investors.
Another frequently asked question on 'how to buy the best silver ETFs' is how. There are several options. One way is to buy a silver ETF:
- Buy and sell based on macroeconomic developments when silver ETFs dip but go down in the future
- Buy once and hold long term: this is called lump-slump
- Invest monthly from a smaller amount: this is called Dollar Costing Averaging
- Combine the above options
For beginners, monthly investing is usually a more effective strategy than attempting to time the market.
How to invest in silver? Tips for beginners
There are several ways to invest in silver:
- Physical silver: This means you buy physical silver, such as coins or bars, and keep it in a safe depository. This can be a good option for investors who are concerned about the safety of their investments.
- Silver shares: think of mining companies that mine silver
- Silver certificates: These are certificates that indicate that you own a certain amount of silver, but you do not have to own physical silver.
- Silver futures: This is a way of speculating on the future price of silver. In this, you buy a contract that obliges you to buy or sell silver at a certain price on a future date.
- Silver ETFs: There are several ETFs available that focus specifically on silver. This also allows you to invest in silver without having to own physical silver.
Our tip to beginners is to choose the best silver ETFs. Don't attempt to buy risky assets you don't know about. It is much smarter to start slowly, based on a lot of diversification. The best silver ETFs offer that spread. Or they track the silver price that might rise in the long run.
Another tip to beginners is to invest only in things you understand.
Besides the best silver ETFs, you can also consider starting with commodity ETFs, stock ETF, and real estate funds. This type of investment has a relatively neutral to lower risk compared to stocks and the like.
It is important to remember that investing in silver, like any other investment, carries risks of money loss. It is therefore wise to do your research and carefully consider your investment strategy before you start investing in silver.
Silver ETF 1. Global X Silver Miners ETF (SIL)
- Ticker symbol: SIL
- Issuer: Mirae Asset Global Investments Co., Ltd.
- AUM: $1.01B
- Shares: 33.9 M
- Index Tracked: Stuttgart Solactive AG Global Silver Miners (USD)
- Expense Ratio: 0.65%
- 5-year performance: -4.10%
- Launch date: April 19, 2010
Trading on the New York Stock Exchange (NYSE) with the SIL ticker symbol, Global X Silver Miners ETF is one of the largest silver miners ETFs. As of the time of writing, this silver ETF has more than $998.49 M in net assets, and its liquidity is excellent, as more than 420,000 shares trade every day.
Instead of holding physical Silver, this ETF aims to track the performance of the Stuttgart Solactive AG Global Silver Miners Index by holding silver mining stocks. If you're seeking growth on your investment, an ETF tracking stocks and shares may be preferable since these companies are more likely to deliver returns than physical Silver. At any given time, the index will be composed of 20 to 40 stocks, and its weighting is largely determined by the market capitalization of the companies in the index.
Also, silver ETFs, including SIL, appear to have a bright future due to factors such as negative interest rates, lowering borrowing costs, and increasing demand for safe assets. Additionally, Silver's relative valuations to gold make this fund attractive. Mining ETFs tend to have fairly concentrated exposure, and SIL follows this trend. Over 75 percent of SIL's assets are held in its top 5 holdings.
In addition to WPM, nearly 25% of assets are dedicated to it, which is an enormous overabundance. However, it's also important to note that silver miner EFTs are generally more aggressive in their trading when the price of silver moves. When silver moves, SIL moves more aggressively as well.
Silver ETF 2. iShares Silver Trust (SLV)
- Ticker symbol: SLV
- Issuer: BlackRock
- AUM: $11.32B
- Shares: 506.5 M
- Index Tracked: LBMA Silver Price
- Expense Ratio: 0.50%
- 5-year performance: 31.79%
- Launch date: April 21, 2006
With $11 billion in assets under management (AUM), iShares Silver Trust (SLV) is also one of the world's largest physically backed silver ETF. With 14,898 tonnes of Silver under trust, SLV is listed on NYSE Arca in USD. SLV tracks the LBMA Silver Price. If you're seeking a fund that mimics real Silver's benefits, such as a hedge against inflation and high liquidity, this is a better option.
Under the Investment Company Act of 1940 or the Commodity Exchange Act, the iShares Silver Trust is neither an investment company nor a commodity pool. So, ETF shares don't need to adhere to the same regulatory requirements as mutual funds. IShares Silver Trust may appeal to investors who are not deterred by those conditions. Investors have earned an average return of 9.58 percent over the past five years.
As of January, SLV had a 30-day average trading volume of 17,188,606 shares, making it the most popular silver ETF in terms of AUM and volume. As well as this, the options chain is well-developed for traders. The expense ratio for SLV is 0.50%.
Silver ETF 3. ETFMG Prime Junior Silver ETF (SILJ)
- Ticker symbol: SILJ
- Issuer: ETFMG
- AUM: $753.09M
- Shares: 67.3 M
- Index Tracked: Prime Junior Silver Miners & Explorers Index
- Expense Ratio: 0.50%
- 5-year performance: 31.79%
- Launch date: November 28, 2012
As one of the original junior Silver ETFs, ETFMG Prime Junior Silver ETF (NYSEARCA: SILJ) is one of the oldest silver ETPs on the market. It's hard to knock this silver ETF when silver prices are rising, even though the combination of miners and small-cap stocks might make it seem unsuitable for conservative investors.
According to ETFMG, SILJ aims to closely replicate the price and yield performance of the Prime Junior Silver Miners & Explorers Index, which holds 32 stocks. The United States produces almost 17% of SILJ's Silver, while Canadian miners account for over two-thirds. Silver production in Peru and Brazil has some emerging market exposure (almost 16%).
As the most active silver ETF on this list, with over 1.4 million shares traded daily, you won't have any trouble buying and selling shares.
However, this ETF is incredibly volatile. With a beta of 1.68, the ETF moves 1.68% when the market moves 1%, highlighting its volatility. There is an overall fee of 0.69%, which works out to $6.90 per $1000 invested. Considering its high fee, it's really the most expensive ETF of the bunch. Nevertheless, we can expect to pay more for "niche" ETFs like this.
This is by far the riskiest silver ETF on this list and should be reserved for those with a high tolerance for risk.
Silver ETF 4. Invesco DB Silver Fund (DBS)
- Ticker symbol: DBS
- Issuer: Invesco
- AUM: $42.00M
- Shares: 1.3 M
- Index: DBIQ Optimum Yield Silver Index
- Expense Ratio: 0.76%
- 5-year performance: 23.20%
- Launch date: January 5, 2007
With its ticker code DBS, the Invesco DB Silver ETF tracks increases and decreases in the DBIQ Opt Yield Silver Index Excess Return using silver futures. With this ETF, you will be able to track changes in the DBIQ Optimum Yield Silver Index Excess Return, which consists of silver futures plus interest earned from US Treasury securities and money market instruments. With an expense ratio of 0.76 percent, the Invesco DB Silver Fund has the smallest total assets of any silver ETF on this list. Through futures contracts, investors can gain exposure to Silver through this ETF. In the context of commodities and futures trading, DBS is structured as a commodity pool that combines investor contributions. In contrast to SIVR and SLV, this fund provides easy investment options. However, with futures contracts attached to it, DBS is subject to contango, backwardation, and other risks.
Silver ETF 5. iShares MSCI Global Silver Miners ETF (SLVP)
- Ticker symbol: SLVP
- Issuer: BlackRock
- AUM: $206.3 M
- Shares: 18.2 M
- Tracked Index: MSCI ACWI Select Silver Miners Investable Market Index
- Expense Ratio: 0.39%
- 5-year performance: 23.20%
- Launch date: January 31, 2012
Compared to traditional sector and industry funds, miners' ETFs typically charge higher fees, and many are more expensive than commodities ETFs like SLV. However, with just 0.39% in annual fees, iShares MSCI Global Silver Miners ETF is the cheapest silver ETF.
SLVP also has some interest in gold and other metal mining companies, like the SIL. Tracking indexes, however, start rebalancing every few months by looking for companies that mine Silver, then seek out those interested in gold. In addition, SLVP restricts large-cap and midcap gold companies' weights to 5% of their market caps, caps all issuer weights at 25%, and ensures that no issuer has a weight greater than 50%.
It is, however, much cheaper than Global X's fund if you are concerned with low expenses. As far as performance goes, it is one of the best-performing silver ETFs. According to its 5-year average annual return, it has returned 9.70%. The expense ratio for SLVP is 0.39%.