Due partially to a fear of inflation and a general rise in commodity prices, investors are looking for ways to invest in new commodity markets. One popular option is to invest in rare and precious metals, including gold and silver. There are many ways to invest in these precious metals, one of which we will explore fully here. Options for investing in precious metals include holding the metal outright, either in jewelry or through gold or silver boolian. Often this has storage costs associated with it, if you are holding significant quantities of it.
Another option for investing in commodities is by owning stock in a mining company. However, sometimes these positions have other risks associated with them, including debt levels and currency risk. For some investors this is not the best way to invest in a commodity.
Investing in an commodity ETF fund may allow an investor the best option to obtain exposure to a particular metal. ETF’s, or exchange traded funds are partnerships that purchase a basket of equity, bonds, or a commodity, and distributes a portion to the owners and a portion to the management fund that organized and manages the ETF. ETF’s operate in differing ways; they may invest in mining companies or acquire directly silver bullion. In this circumstance the fund accumulates and stores silver bullion allowing you the investment directly in silver, without the risk of theft or additional storage costs.
iShares Silver Trust
iShares Silver Trust is a popular trust with almost $10 billion in assets. This size allows investors sufficient liquidity to be able to trade these ETF shares on a regular basis. The ETF buys and holds silver bullion and has minimal storage costs. Due to the size and purity of the investment, this is one of the top 3 Best Silver ETF Funds.
ETFS Physical Silver Shares
ETFS Physical Silver Shares is another ETF that holds phyiscal silver bullion. This fund is much smaller than iShares Silver Trust with less than $500 million is assets. This is both a blessing and a curse, as the smaller size means less liquidity for regular trading. Howevre, the smaller size may mean more trading opportunities as the price can drift lower proviving a better entry point into the ETF fund.
Global X Silver Miners ETF
Global X Silver Miners ETF is an ETF that provides exposure to the silver miners, rather than the direct metal. This allows and investor the ability to invest directly in a variety of miners which may have different fortunes than the underlying product that they sell. As such, in many situations, the silver miners do better or worse than the underlying metal due to fluctuations in operating costs including the costs associated with extracting the metal from the ground.
This often times, leads to an unfair bias in the price of the silver miners that may be exploited by an investor. Many times, this can lead to Global X Silver Miners ETF being one of the top 3 Best Silver ETF Funds. This ETF does not have a significant amount of volume, so investors should be cautious when instituting a position in this ETF fund.
Conclusion
There are many ways to invest in silver, and the silver ETF is just one of them. ETF’s offer ease, minimal additional costs, and access to a variety of different styles of investing. Remember ETF’s can be bet on both the long and on the short side of a trade.
Three ETF’s that offer unique strategies in silver are iShares Silver Trust, ETFS Physical Silver Shares, and Global X Silver Miners ETF. There are some of the Top 3 Best Silver ETF Funds out there in terms of size and investing methodology, and should be monitored and explored by a potential investor before instituting a position.
However, depending on the current price, these ETF’s provide good exposure to silver, a precious metal that is not as easily accessible to investors as a direct ownership in stock typically is. Silver adds diversification to a portfolio and may lead to greater returns particularly if inflation hits. Consider silver ETF’s for meeting these needs in your portfolio.
There are other types of ETFs, like the gold ETF. The gold ETF fund is an extremely popular ETF — especially lately.
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