3 Silver ETFs for 2022 (2024)

Silver ETF: What It Is and How It Works

Silver is a precious metal and a commodity, used in a wide range of end products including jewelry, tableware, electronics, and batteries. Silver also has a long history of use as coinage and as a store of value, given its relatively high value-to-weight ratio.

A silver ETF is an exchange-traded fund that seeks to track the price of silver, less expenses. Silver ETFs provide investors with indirect exposure to the price movements of silver without having to physically hold the underlying asset. To track the price of silver, a silver ETF may hold physical silver, stocks in silver mining companies, or silver futures.

Other than investing in ETFs that track the price of silver, investors may also choose silver inverse ETFs, which are designed to produce returns that are the opposite of an underlying benchmark index, or silver leveraged ETFs, which use financial derivatives and debt as leverage to amplify the returns of an underlying index.

Investors who want to invest in silver ETFs have six to choose from. There are two silver ETFs that seek to track the price of silver, one ETF that uses futures to track the price of a silver index, one ETF that invests in silver mining companies, one silver inverse ETF, and one silver leveraged ETF.

Tip: The performance of different silver ETFs will vary considerably from each other and from the base metal itself, depending on the nature of the ETF. Investors should fully understand how a particular ETF tracks the price of silver before investing.

Evaluating a Silver ETF

As with any other investment type, the process of choosing the best silver ETF to suit an investor's needs may begin by narrowing down the choices with an ETF screener. The Seeking Alpha screener includes silver ETFs in the "commodities" category or asset class and then in the "commodities focused" sub class.

Selection criteria for choosing a silver ETF may include:

• Performance: 1-year return is the primary selection criteria for evaluating performance on this particular list of silver ETFs. However, investors may review longer periods, such as 3-, 5-, and 10-year returns before selecting an ETF for their portfolio.
• Expenses: When ETFs track the exact same index or commodity, the one with the lowest expense ratio will generally outperform those with higher expenses. The silver ETFs listed below have lower expense ratios than other ETFs tracking the price of silver.
• Structure: All of the silver ETFs in our list are structured as grantor trusts. Grantor trusts are well-suited to single commodity ETFs as they allow the funds to hold single assets like silver without violating the usual fund rules about diversification.
• Objective: To make our best performing silver ETFs list, only ETFs that seek to track the price of silver or a silver index, less trust expenses, are considered. Other silver ETF objectives and strategies, such as inverse ETFs or leveraged ETFs were ignored for this list.
• Portfolio holdings: ETFs that track the price of silver don't have holdings like stock or bond mutual funds; they may hold silver bullion or assets that are backed by silver; others may purchase silver futures contracts.
• Quant Ratings and Factor Grades: Seeking Alpha's Quant Ratings and Factor Grades can be used for evaluating stocks or ETFs. In this article, we provide Factor Grades, which rate ETFs by five "factors" - Momentum, Expenses, Dividends, Risk, and Asset Flows. To do this, we compare the relevant metrics for the factor in question for the ETF to the same metrics for the other ETFs in its asset class. The factor is then assigned a grade, from A+ to F.

Note: A silver ETF is generally considered to be one that is structured as a grantor trust and that seeks to track the price of silver, less expenses. Other ETFs that provide indirect exposure to the price of silver, such as silver inverse ETFs, silver leveraged ETFs, and silver ETNs, are generally considered to be alternative forms of silver ETFs.

Top 3 Silver ETFs by Market Performance

1. Invesco DB Silver ETF (DBS)

Invesco DB Silver ETF (DBS) is a silver exchange-traded fund that seeks to track the DBIQ Optimum Yield Silver Index Excess Return, plus the interest income from the Fund's holdings of primarily US Treasury securities and money market income, less the fund's expenses. The DBIQ index is a rules-based index composed of futures contracts on silver.

• As of date: January 31, 2022
• 1-year performance: -18.11%
• Expense Ratio: 0.75%, or $75 annually for every $10,000 invested
• Annual Dividend Yield: None
• Three-Month Average Daily Volume: 1,810

Invesco DB Silver ETF Performance

Invesco DB Silver ETF performed slightly below the silver index benchmark, which is to be expected for a fund that passively tracks an index or commodity. DBS edges out other silver ETFs to lead in the 1-year return but lags in the longer-term periods.

Like other top-performing silver ETFs, DBS significantly underperformed the S&P 500 index over the past year.

Here is where a $10,000 investment in DBS, 1 year and 3 years ago, would be as of January 31, 2022:

• 1 year ago: $8,189
• 3 years ago: $13,147

Invesco Silver ETF Structure, Objective & Holdings

• Inception Date: 01/05/2007
• Issuer: Invesco
• Ticker: DBS
• Primary exchange: NYSE Arca
• Structure: Partnership
• Objective: Track the price of silver, less trust expenses.
• Holdings: Silver futures

Invesco DB Silver ETF Quant Rating Grades

2. Aberdeen Standard Physical Silver Shares ETF (SIVR)

Aberdeen Standard Silver Shares ETF is a silver exchange-traded fund physically backed by silver bullion and coins held in a vault on behalf of investors. SIVR seeks to track the performance of the price of silver, less trust expenses. The only holding of SIVR is physical silver.

• As of date: January 31, 2022
• 1-year performance (NAV): -18.19%
• Expense Ratio: 0.30%, or $30 annually for every $10,000 invested
• Annual Dividend Yield: None
• Three-Month Average Daily Volume: 663k

Aberdeen Standard Physical Silver Shares Performance

Aberdeen Standard Silver Shares ETF (SIVR) performed slightly below its silver price benchmark, which is to be expected for a fund that passively tracks an index or commodity. Like other silver ETFs that track the price of silver, SIVR significantly underperformed the S&P 500 index over the past year.

Here is where a $10,000 investment in SIVR, 1 year and 3 years ago, would be as of January 31, 2022:

• 1 year ago: $8,181
• 3 years ago: $14,391

Aberdeen Standard Physical Silver Shares Structure, Objective & Holdings

• Inception Date: 07/24/2009
• Issuer: Abrdn PLC (Formerly Aberdeen Standard Investments)
• Ticker: SIVR
• Primary exchange: NYSE Arca
• Structure: Grantor Trust
• Objective: Track the price of silver, less trust expenses.
• Holdings: Silver bullion bars stored in a vault in London, UK.

Aberdeen Standard Physical Silver Shares Quant Rating Grades

3. iShares Silver Trust (SLV)

iShares Silver Trust (SLV) is a silver exchange-traded fund physically backed by silver bullion and coins held in a vault on behalf of investors. SLV seeks to track the performance of the price of silver, less trust expenses. The only holding of SLV is physical silver.

• As of date: January 31, 2022
• 1-year performance (NAV): -18.37%
• Expense Ratio: 0.50%, or $50 annually for every $10,000 invested
• Annual Dividend Yield: None
• Three-Month Average Daily Volume: 26.1 mil

iShares Silver Trust Performance

iShares Silver Trust performed slightly below its silver price benchmark, which is to be expected for a fund that passively tracks an index or commodity. Like other silver ETFs that track the price of silver, SLV significantly underperformed the S&P 500 index over the past year.

Here is where a $10,000 investment in SLV, 1 year and 3 years ago, would be as of January 31, 2022:

• 1 year ago: $8,163
• 3 years ago: $13,993

iShares Silver Trust Structure, Objective & Holdings

• Inception Date: 04/21/2006
• Issuer: BlackRock
• Ticker: SLV
• Primary exchange: NYSE Arca
• Structure: Grantor Trust
• Objective: Track the price of silver, less trust expenses.
• Holdings: Silver bullion bars stored in a vault in London, UK.

iShares Silver Trust Quant Rating Grades

Bottom Line

Silver ETFs seek to replicate the price movement of silver, less expenses. A silver ETF provides indirect exposure to the price of silver, so shareholders of these silver funds do not take possession of the physical asset. Investors should keep in mind that the price of silver can fluctuate significantly in the short term.

Warning: This article is for information purposes only; thus, under no circ*mstances does this information represent a specific recommendation to buy or sell securities. Furthermore, past performance is no guarantee of future results.

Kent Thune