With an estimated 1.74 million metric tons of silver having been mined so far, it’s no surprise that silver is one of the most popular precious metals as an investment choice.
One of the easiest ways to invest in silver is through an exchange-traded fund (ETF). So, in this guide, I’ll show you some of the best silver ETFs available in the UK, and how to invest in silver using other methods, too.
Also consider: How to Buy Gold Stocks and the Best Gold ETFs UK
5 of the best silver ETFs to invest in
- abrdn Standard Physical Silver Shares ETF
- Global X Silver Miners ETF
- Invesco DB Silver Fund ETF
- iShares Silver Trust ETF
- Proshares Ultra Silver ETF
Find out more about each of these silver ETFs below.
1. abrdn Standard Physical Silver Shares ETF (SIVR)
Trading on the New York Stock Exchange (NYSE) with the ticker symbol of SIVR, abrdn’s Standard Physical Silver Shares ETF aims to track and reflect the performance of silver itself, minus expenses of the fund.
The fund exclusively owns actual silver bars held in a London vault, rather than futures contracts or other derivatives of the precious metal. This makes it ideal for investors seeking a hedge against inflation, as the value is entirely defined by the current market price of the underlying silver it owns.
However, as the fund does not undertake any speculating activity on silver, this may mean it isn’t a great option for long-term investors looking for growth on their investment.
As of 5 October 2022, the fund had 48,055.80 ounces of silver, and offered a total expense ratio of 0.30%.
2. Global X Silver Miners ETF (SIL)
The Global X Silver Miners ETF is also listed on the NYSE, trading under the SIL ticker code.
Rather than holding physical silver, this ETF targets silver mining stocks, holding around 40 constituent companies, and seeks to track the performance of the Solactive Global Silver Miners Total Return Index.
Choosing an ETF that tracks stocks and shares rather than physical silver can be preferable if you’re seeking growth on your investment, as these companies have the potential to provide returns which physical silver is typically unlikely to do.
The fund had a total expense ratio of 0.65% and net assets of more than $850 million, as of 5 October 2022.
3. Invesco DB Silver Fund ETF (DBS)
A slightly different kind of silver ETF, the Invesco DB Silver Fund ETF (ticker code: DBS) uses silver futures to track positive and negative changes in the DBIQ Optimum Yield Silver Index Excess Return.
This can be an appropriate choice for investors interested in the speculative trading of commodities and precious metals, offering you an opportunity to do so under the guidance of a professional fund manager.
However, if you’re interested in silver as a “safe haven” investment, the high-risk nature of this fund may mean it isn’t appropriate for you.
As you may be able to imagine, the slightly more specialised nature of this fund means it has a higher total expense ratio compared to some other funds, sitting at 0.77% as of 5 October 2022.
4. iShares Silver Trust ETF (SLV)
Much like the abrdn SIVR ETF, the iShares Silver Trust ETF (ticker code: SLV) also seeks to track the performance of the overall silver market, using the LBMA Silver Price as its reference benchmark.
This makes it a more suitable option if you’re looking for a fund that will emulate the benefits of real silver, such as providing a hedge against inflation and being highly liquid.
SLVR is one of the largest silver ETFs in the world. As of 5 October 2022, the fund had just under 15,000 tonnes of silver worth nearly $10 billion.
The fund has a total expense ratio of 0.50%, slightly higher than similar funds but still a relatively low-cost method for investing in silver.
5. Proshares Ultra Silver ETF (AGQ)
Trading under the AGQ ticker code, the Proshares Ultra Silver ETF offers another method for investing in silver through an ETF.
The fund uses the Bloomberg Silver SubindexSM as its benchmark, seeking to provide returns that are double the index’s daily performance. It looks to achieve this through various different methods of trading silver, including:
- Futures contracts
- Forward contracts
- Options contracts
- Swap agreements.
AGQ does not hold any physical silver itself.
It’s crucial to note that this is a leveraged ETF. As a result, while the fund seeks magnified gains, losses will also be magnified to the same extent.
The fund also has the highest total expense ratio of the ETFs on my list, charging 0.95% as of 5 October 2022.
Are silver ETFs good?
Silver ETFs can certainly be an effective way of gaining exposure to silver without actually having to own the metal yourself.
As you have seen from my list, silver ETFs come in many different forms, with some holding physical silver while others invest in silver-producing companies or trade futures contracts for the metal.
Additionally, they can be preferable to buying individual stocks and shares, as buying units in a fund gives you access to multiple investments in one go. This can help you to create an even more diversified portfolio.
It can also be cheaper than buying shares in individual companies, which can add up in trading fees or commission compared to a single purchase of units in an ETF.
And, because ETFs are “exchange-traded” products, you can buy and sell them throughout the day on the stock exchange. This makes them highly accessible, while also allowing you to capitalise on smaller swings in value throughout the day.
Which is the best silver ETF?
It’s difficult to identify one silver ETF as better than another because it depends on what metrics you use to judge them.
Elements to consider when choosing the right silver ETF for you include:
- What they invest in or track – whether that’s physical silver, futures contracts, or a range of companies involved in precious metals
- Historical returns – although of course, past performance is not necessarily an indicator of future performance
- Your investment objectives and personal circumstances – that is, how much you can afford to invest, and what you hope to achieve with your invested money.
Make sure you consider all these factors before you invest in silver ETFs.
Other ways to invest in silver
There are many different kinds of silver assets you can access across the market. Read on to discover a few of these, how they work, and the various advantages and drawbacks of investing in silver using them.
Buying physical silver
Firstly, you could consider buying physical silver. This can take many forms but might include everything from silver bullion bars to jewellery and coins.
The main benefit of investing in silver this way is that you have a tangible asset in hand. So, if you’re investing to have an inflation hedge in your portfolio, this can be a useful way to achieve those aims.
One notable advantage of buying certain silver coins, such as Silver Britannias, is that they are produced by the Royal Mint and so are considered to be legal tender in the UK. As a result, this makes them exempt from Capital Gains Tax (CGT), while other physical forms of silver are not.
Of course, as with any precious metal, there are additional considerations to take into account if you want to purchase silver physically.
While you might be comfortable holding small amounts in your home, something such as silver bullion bars will require secure storage somewhere. This adds an extra cost beyond the value of just your investment.
Furthermore, you may want to consider insuring any silver you hold to protect it from damage or theft. Again, this will see you incur higher costs on your investment.
Investing in silver stocks
Rather than owning physical metal, you could invest in individual companies involved with silver by buying stocks and shares in these.
There are many different types of silver companies available on the stock market. For example, you could consider investing in silver mining companies. There are also businesses that specialise in holding physical silver or even some that provide the cash for silver mining companies to expand their mines, offering an alternative way to access the silver stock market.
Silver stocks can be a good option for long-term investors looking to hold their investment for a period of at least a year. Some companies may also pay dividends to investors, offering a regular income stream in the form of dividend payments.
The downside to buying stocks and shares is that you’ll have to own the underlying asset. So, if the shares fall in value, so will your investment. You should always do your own independent research before you buy stocks.
Additionally, if your broker or investment platform charges trading fees or commission, it might become expensive to buy individual stocks – although it is possible to get around this problem by choosing one of the many commission-free brokerage services, such as eToro.
Trading derivatives on silver stocks
You can also trade derivatives of silver stocks, rather than directly investing in them. For example, you can spread bet or trade CFDs on the future performance of silver stocks, depending on whether you think they will rise or fall in value.
This allows you to generate a return on silver stocks without ever actually having to own the underlying asset.
It’s important to note that these are highly complex financial instruments, and the majority of retail investor accounts lose money when spread betting and trading CFDs.
Make sure you fully understand this risk before you invest, and seek investment advice if you’re unsure whether these are appropriate assets for you.
Speculating on the price of silver
Beyond CFDs and spread betting, there are various other methods you can use to speculate on silver prices, too.
Buy silver options
When trading silver options, you are buying the right (not the obligation) to buy or sell silver at a predetermined price before a certain expiration date.
This allows you to lock in a price to trade silver later. You can use this method to speculate on how silver will move in future, or essentially as “insurance” on silver you already own to guarantee a price at which you can sell it.
You are not obligated to carry out your options contract if it no longer suits your needs.
Buy silver futures
Futures contracts involve a buyer and seller agreeing to trade silver at a predetermined price on a certain date. Unlike options, both buyer and seller are obligated to make the trade on expiry.
Just as with options trades, you can generate a return by entering a futures contract based on whether you think silver will rise or fall in value.
What is the best way to invest in silver?
The best way to invest in silver will ultimately come down to your investment goals and your personal tolerance for risk.
If you’re looking to include silver in your portfolio as a hedge against inflation, you may want to choose assets that are tied directly to the metal’s value. For example, physical silver or ETFs that hold silver themselves could be a good option for this.
Meanwhile, if you’re looking to generate returns in your portfolio using silver and you have a higher tolerance for risk, assets that let you speculate on its future value could be useful to you.
In that case, futures contracts, options contracts, CFDs, and spread bets may be the most suitable ways for you to invest.
It can be helpful to work out your investment goals first to narrow your focus and find the right methods for you.
Is silver a good investment in 2022?
In 2022, silver certainly can be a good investment. Silver and other precious metals, such as gold, are often included in portfolios during periods of high inflation.
So, with the Office for National Statistics having measured inflation to have reached 9.9% in the 12 months to August 2022 in the UK, finding assets that are suitable for inflationary environments could be a sensible choice.
There are many reasons why this is the case, but two major ones are:
- As a tangible, physical asset, silver retains its value against inflation, unlike fiat currencies such as the pound or the US dollar.
- Silver is highly liquid, making it accessible if you need the value tied up in your assets.
However, one key point to note about silver is that, unlike gold, its market value doesn’t work inversely to wider circumstances.
Investors often choose gold to provide stability during periods of market uncertainty. Indeed, financial markets have been relatively volatile over the past few weeks, especially in the UK since the announcement of tax cuts in the chancellor’s mini-Budget on 23 September 2022.
But generally, silver rises in bull markets and falls in bear markets. That means, while markets are dipping as they have in the UK recently, silver holdings may have lost value too.
Equally, that also means you may be able to capitalise on rises in value soon, as the silver spot price could increase if and when markets recover.
All in all, adding silver to your portfolio in 2022 could be a sensible investment decision as it may help you combat inflation and be profitable during periods of market uncertainty.
Of course, you must do so in line with your personal risk tolerance alongside a range of widely diversified assets.
Seek advice if you’re unsure whether silver is a suitable investment for you.
How to Invest in Silver FAQs
Is silver a good investment?
Are there any ETFs for silver?
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Trading CFDs and financial spread betting are complex instruments, and more than half of retail investor accounts lose money when trading commodity CFDs and financial spread betting. Please make sure that you know these risks before you start trading and that you’re aware there’s a high risk of losing money rapidly on your investment.