The iShares Silver Trust (NYSEARCA: SLV) is an exchange-traded fund (ETF) that tracks the silver spot price, less expenses and liabilities, with silver bullion held in London. It is the most liquid and largest silver fund. The fund has a modest level of institutional ownership with 15.2% of the company’s stock held by institutions. Of the institutional owners, the top ten companies hold a 6.05% ownership.
Many investors want to know the institutional ownership of an investment before they buy. There are both positives and negatives when it comes to institutional ownership. The positive of institutional ownership is that institutions complete thorough analyses before investing, and they have access to the best when it comes to money management tools and analysts. Institutional ownership of a stock or ETF shows that institutions believe it is a good investment; however, too much institutional ownership can be a bad thing. If something happens to a company that causes its institutional owners to sell their stock, share prices can sink quickly. The share price collapse can be huge if institutions hold a large percentage of the company's shares.
Another important characteristic of institutional ownership to analyze is share sales and purchases. It can be a bullish signal if institutions are increasing their holdings in an investment, but it can be a bearish sign if institutions are liquidating their positions. According to recent filings institutional holders as a whole increased their ownership of SLV by 8,647 shares over the latest reported quarter. Although SLV has been overall declining since its spike in 2011 when it traded at over $48 (as of October 31st share price was $16.92), the fund has had a good year so far with YTD 37.98%. Of the top institutional holders, the following is a highlight of share position adjustments according to the latest update.
Institutions Increasing Their SLV holdings
Meryll Lynch, Pierce, Fenner & Smith Inc. was the largest buyer adding 2,594,000 SLV shares to its portfolio, an approximate increase of almost 130%. MLPF&S is also the fund's largest institutional investor with 1.2% ownership. Wells Fargo Bank N.A. added 1,994,000 shares, more than tripling its position.
Other large share purchases from the top ten holders includes Barclays Capital, Inc. bringing its ownership to 0.34%; Morgan Stanley Smith Barney LLC with a total ownership of 1.09%; and SG Americas Securities LLC with a total ownership of 0.44%.
Institutions Decreasing Their SLV Holdings
The largest seller was AssetMark, Inc. which sold 4,683 shares, completely liquidating its position. JPMorgan Securities and Credit Suisse Securities sold 2,585 and 2,189 shares respectively. The ladder launched Credit Suisse Shares Covered Call Exchange Traded Notes – its own silver fund – in March, 2016, and has been selling since then.
Other major share sales by major institutional holders included Synovus Trust Co., Key Group Holdings (Cayman) Ltd., LPL Financial all bringing their ownerships to less than 0.01%.