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We have already seen unprecedented activity in the silver market from private traders in the last few trading sessions, which has been enough to shift the silver price.

Many traders not currently exposed to silver may be wondering how to get future exposure to moves in the silver market. Silver broke the $30 limit yesterday, although at pixel time had slumped down to $27.5. The silver market had hit some heavy selling, likely as some institutional money took profits overnight in Asian markets by the looks of it.

If there is another run on silver, one of the better ways to get exposure to the market is via an ETF, which can track the price of the commodity without the risk of a CFD or financial spread bet. If you are happy with the leverage, a financial spread betting account with one of the leading brokers will usually provide you with access to the silver market, but make sure you keep an eye on your risk!

Steady flows into silver ETFs since last summer

The silver ETF market has already been registering steady flows into silver according to data from ETF specialist TrackInsight. Institutional asset flows into silver ETFs went positive last summer, and pro investors have remained steady silver bulls ever since. There has been some heavy and unprecedented buying of the ETFs in recent sessions according to asset flows registered by TrackInsight.

There are currently 26 silver ETFs on the market, with the LBMA silver price being the favourite silver index to track. The iShares Silver Trust (SLV) has been one of the favourites for the market, registering turnover of €777m on Monday. It is arguably the big daddy of the pack and the go to ETF for most first time silver buyers.


There is not a great deal to separate ETFs that passively track the LBMA price: leading ETFs include WisdomTree Physical Silver (LSE:PHAG), Xtrackers IE Physical Silver (LSE:XSLR) and Swisscanto Precious Metals (SIX:JBSIUA). Most ETFs in this space replicate the index by just holding silver bullion in the vaults of custodian banks.

Alternatives to the LBMA silver price

There are some other ETFs which track alternative silver indexes to the LBMA one: there are four funds tracking the Bloomberg Silver Subindex, for example. Among these is another WisdomTree Silver ETF and a leveraged WisdomTree Silver 2x Daily Leveraged fund. The latter is a good example of how you can still trade silver ETFs with a limited degree of leverage.

Players on the silver price can also trade ETFs based on an index of leading silver miners. We have seen a surge in the share prices of many silver miners in the past three sessions. For example the Prime Junior Silver Miners & Explorers GTR Index was launched in 2017 and tracks 48 stocks in the silver mining space, including First Majestic Silver Corp, Hecla Mining Co and Pan American Silver Corp among many others. Here you have a broad spread of exposure across silver mining stocks, although note the top three stocks account for nearly 40% of the index.

The index is tracked by the ETFMG Prime Junior Silver ETF (NYSEARCA:SILJ).

ETFs are accessible via most brokers and trading platforms. Most are US-listed by the range of ETFs available on European stock exchanges is also growing in size by the month. They can be traded just like normal shares and are much more liquid than standard mutual funds.

Related

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Michael Morton

Michael Morton

Michael has worked within the Financial Industry for more than 20 years. Starting out as a financial analyst, he has extensive experience working with fund management groups and brokerages.

With an interest in Stocks and Shares, Funds, ETFs and Commodities, his investment focus is medium to long term gains, with the objective of financial security on retirement, and building wealth for his young children for their adult life. His broker of choice is Hargreaves Lansdown.

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