Silver ETF

AAA

DEFINITION of 'Silver ETF'

An exchange-traded fund that invests primarily in raw silver assets, which are held in trust by the fund manager and/or custodian. Typically, silver ETFs are established as grantor trusts, where each share of the ETF represents the specific right to a precise amount of silver, measured in ounces.

Silver ETFs aim to track as closely as possible the spot price of silver on the open market.
The first to market was the iShares Silver Trust, managed by Barclays Global Investors and introduced in 2006.

INVESTOPEDIA EXPLAINS 'Silver ETF'

The introduction of silver and gold ETFs in the early 2000s opened up an attractive investment vehicle for both individual and institutional investors. Precious metals like silver are seen as a hedge against inflation. ETFs allow for greater liquidity than holding the metal itself, and are easier for individuals to access than the futures markets.

Silver ETFs held in taxable accounts are subject to a higher long-term capital-gains rate on any holdings of more than one year. Because silver ETFs are considered to be investments in the raw metal itself, gains are assessed on silver as a "collectible" and are subject to a 28% long-term capital-gains rate. Silver ETFs held in IRAs are not subject to this higher gains tax, having been given a special clearance by the Internal Revenue Service.

RELATED TERMS
  1. Gold Fund

    A mutual fund or exchange-traded fund (ETF) that invests primarily ...
  2. Commodity ETF

    Exchange-traded funds that invest in physical commodities such ...
  3. Index Fund

    A type of mutual fund with a portfolio constructed to match or ...
  4. Spot Price

    The current price at which a particular security can be bought ...
  5. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
  6. Spot Market

    1. A commodities or securities market in which goods are sold ...
Related Articles
  1. Fundamental Analysis

    A Silver Primer

    Find out what affects the price of silver, the types of investments that can be made and the methods in which it is traded.
  2. Options & Futures

    Options On Gold And Silver ETFs

    Trading the commodities can mean extra expenses. These commodity-based ETFs give you the flexibility of trading like stocks.
  3. Options & Futures

    Trading Gold And Silver Futures Contracts

    If you are a hedger or a speculator, gold and silver futures contracts offer a world of profit-making opportunities.
  4. Options & Futures

    Commodities That Move The Markets

    Find out how the everyday items you use can affect your investments.
  5. Retirement

    Contemplating Collectible Investments

    Profit margins are slim, but that needn't deter those with a passion for eras past.
  6. Options & Futures

    Trading The Gold-Silver Ratio

    This method may seem arcane, but many well-established strategies rely on it.
  7. Economics

    Strike Gold With Junior Mining

    Learn what to watch out for to ensure your "sure thing" isn't another Bre-X.
  8. Insurance

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  9. Options & Futures

    Avoid Future Shock By Protecting Your Portfolio With Futures

    Worried about protecting your portfolio of diversified stocks and assets? Using futures with correct strategies can help.
  10. Mutual Funds & ETFs

    The ABCs of Mortgage-Backed Securities ETFs

    ETFs focused on mortgage-backed securities, or MBS, offer an opportunity to further diversify the fixed-income portion of your portfolio.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center