## Silver Hits Record Highs: How Should Investors Position Themselves? Silver ETFs Become the First Choice for Entry

Expectations of Federal Reserve rate cuts, tightening global supply, and the U.S. officially including silver in the critical minerals list have combined to produce an astonishing silver price performance. On December 9, 2025, London spot silver broke the $60 per ounce mark, later soaring to a historic high of **$64.6/oz**.

How fierce is this rally? Numbers tell the story. Since the beginning of the year, silver has surged over **100%**, outpacing gold by more than 60 percentage points and far exceeding the approximately 20% gain of the NASDAQ Composite, which represents tech stocks. International investment banks like UBS are optimistic about the future, raising their 2026 silver target price to the $58–$60 range, with the possibility of reaching **$65/oz**.

In this rally, **Silver ETFs** have quickly become popular among retail investors due to their trading convenience and low barriers. But before jumping in, you need to understand: How do silver ETFs actually work? What are the differences among various products? How can you buy them cost-effectively?

## Why Choose Silver ETFs? A Real Comparison: Physical Silver Bars vs. Financial Products

The essence of silver ETFs is simple: **Use financial instruments to participate in silver price movements without holding physical silver yourself**.

It seems straightforward, but comparing to physical silver reveals the differences. Investing in physical silver appears to give you tangible assets, but in reality, it’s a hassle. First, storage issues—rent a bank safe deposit box (which can be costly annually), find a professional vault, or risk oxidation, theft, or damage by storing at home. Buying and selling also involves dealing with reputable silver shops or precious metals dealers, incurring 5-6% spreads and commissions, with liquidity far inferior to financial products.

In contrast, the logic of silver ETFs is: the fund directly holds physical silver or silver futures, tracking silver prices. When silver rises 5%, your ETF’s net asset value (NAV) also increases by about 5% (minus management fees). The process is as simple as buying stocks—open an account, place an order, trade—all within your brokerage account, with liquidity far surpassing physical silver.

## What Do Silver ETFs Look Like? In-Depth Analysis of 7 Popular Products

The market offers many silver ETFs, but the core differences are mainly two: **Underlying assets** (physical vs. futures) and **Management fees**.

### Major International Products

**SLV (iShares Silver Trust)** is the most well-known globally, managed by BlackRock, with assets exceeding $30 billion. It directly holds physical silver, tracking the LBMA benchmark price, with a management fee of only 0.50%. As a passive fund, it rarely buys or sells silver, only periodically selling small amounts to cover operational costs, making it very friendly for long-term investors.

**PSLV (Sprott Physical Silver Trust)** is another physical silver ETF, launched in 2010, with about $12 billion in assets. Its unique feature is that investors can redeem physical silver—want to take actual possession? Just redeem. However, note that PSLV is a closed-end fund, and its trading price is determined by market supply and demand, often showing **premium or discount** (relative to NAV), which differs from typical ETFs.

Among futures-based options, **DBS (Invesco DB Silver Fund)** tracks COMEX silver futures, with a fee of 0.75%, suitable for investors seeking low-cost silver price tracking.

### Leverage and Inverse Products—For Experts Only

**AGQ (ProShares Ultra Silver)** offers 2x long leverage, with a fee of 0.95%, designed for short-term traders wanting amplified gains. But remember: leverage is a double-edged sword. If silver drops 10%, AGQ could fall 20%. The compounding effect can erode returns over time, so **only suitable for short-term trading**.

**ZSL (ProShares UltraShort Silver)** is a 2x inverse leveraged product, suitable for bearish views on silver or hedging risks. Similarly, **long-term holding will be destroyed by time decay**.

### Taiwan-listed Options

**Fubon Silver ETF (00738U)** is a local choice for Taiwanese investors, tracking the Dow Jones Silver Excess Return Index, mainly investing in COMEX futures. Management fee is 1%, and the product has a "high volatility" risk level, suitable for investors who can tolerate fluctuations.

**SLVP (iShares MSCI Global Silver and Metals Miners)** invests in global silver mining company stocks, offering leverage—when silver prices rise, mining revenues increase while costs stay the same, often leading to stronger gains. However, risks are higher, with larger bid-ask spreads. By 2025, such stocks surged 142%, far outperforming pure silver ETFs.

## How to Buy? Two Main Channels for Taiwanese Investors

### Method 1: Discretionary Trust—The Safest Choice

Through domestic brokerages (Fubon, Cathay, Yuanta, Mega, etc.) entrusting overseas brokers to execute trades. The process is simple: open a discretionary trust account → choose TWD or foreign currency settlement → place orders.

**Advantages**: Regulated by Taiwan’s Financial Supervisory Commission, funds stay in Taiwan, tax handling by broker, Chinese interface friendly.

**Disadvantages**: Higher fees (usually 0.1-0.15% trading fee plus FX costs), limited tradable products.

### Method 2: Overseas Brokers—Lower Costs

Open an account directly on overseas platforms (like Interactive Brokers), eliminating middlemen and minimizing costs. Steps: open account → wire USD → place trades.

**Advantages**: Very low or zero commissions, extensive ETF options, support for advanced tools.

**Disadvantages**: English interface, self-managed remittances and taxes (U.S. withholding tax on dividends at 30%), funds are overseas, making dispute resolution more complex.

## ETF Premiums: Are You Really Buying at a Discount?

A commonly overlooked issue is **ETF premiums**. Especially for closed-end funds like PSLV, trading prices may not match actual NAV.

For example, if PSLV’s NAV is $20 per share but the market trades at $20.5, you pay $20.5 for assets worth $20, and the $0.5 difference is a **premium**. Conversely, if the market price is below NAV, it’s a discount.

Open-ended ETFs like SLV or DBS are less prone to this issue because they can create and redeem units to balance supply and demand. Still, under certain circumstances, slight premiums or discounts may occur. Before buying, check the **NAV vs. market price** and choose moments with smaller spreads.

## Comparison of 4 Silver Investment Types

| Investment Type | Advantages | Disadvantages | 2025 Return Estimate |
|------------------|--------------|-----------------|---------------------|
| **Silver ETF** | Easy trading, high liquidity, no storage costs, beginner-friendly | Management fees erode returns, no physical ownership, tracking errors possible | ~103% (silver price increase minus fees) |
| **Physical Silver Bars** | Actual ownership, crisis hedge, privacy | Storage costs high, theft risk, low liquidity, 5-6% buy-sell spread | ~95-100% (after costs) |
| **Silver Futures** | High leverage, flexible long/short, no storage issues | Very high risk, expiry management, complexity, high fees | 200%+ (if correctly timed and leveraged) |
| **Silver Mining Stocks** | Strong leverage, growth potential, easy trading | Not pure silver exposure, company risk, higher volatility | ~142% (mining ETF performance) |

## Tax Considerations: Do You Need to Pay More?

**Buying Taiwan-listed silver ETFs** (like Fubon Silver ETF) is simplest: purchase tax-free, only 0.1% transaction tax upon selling, same as stocks.

**Buying overseas ETFs** is more complex. Silver ETFs track commodity prices and usually don’t pay dividends, so dividend tax issues are minimal. But when selling, gains are considered **overseas property transaction income** in Taiwan.

Thresholds: If total overseas income ≤ NT$1 million annually, no additional tax. Over NT$1 million, the full amount is included in basic income. For amounts exceeding NT$7.5 million, a 20% tax applies on the excess.

In short: unless your annual overseas investment gains exceed NT$1 million, most investors don’t need to worry.

## Risks You Must Know When Investing in Silver ETFs

Silver prices are **much more volatile than gold or stocks**. Although 2025 saw over 100% gains, history shows sharp corrections of 40-50% are common, and short-term losses can be startling. Only **high risk-tolerance investors** should consider.

Futures ETFs incur rollover costs, potentially resulting in lower long-term returns than physical silver. Physical ETFs track more precisely but have annual costs of 0.4-0.5%, gradually eroding gains.

Additionally, silver prices are influenced by geopolitical events, industrial demand (solar, electronics, automotive), monetary policies, and other factors, making them highly unpredictable. Always assess your risk appetite and investment horizon before buying.

## Conclusion: Smart Participation in Silver Markets

Silver ETFs are indeed convenient tools to participate in the silver bull market. Compared to the hassle of physical storage, they offer liquidity, transparent pricing, and low transaction costs, making it easy for retail investors to enter.

But the premise is: **Understand the differences among ETFs** (physical vs. futures, leverage, management fees), **watch for premiums and discounts**, **assess your risk tolerance**, and **diversify rather than concentrate**. Regularly review market changes and avoid being blinded by short-term gains—that’s the smart way to invest in silver.