Silver exchange-traded funds (ETFs) closely track the price of silver and are generally more liquid than owning the precious metal itself. Like other precious metals, silver tends to be favored by investors seeking a hedge against inflation or a safe haven in times of market turmoil. Silver ETFs are generally structured as grantor trusts, a typical structure for funds whose assets are a single commodity held physically in a vault. This grantor trust structure means that each share of ownership in the ETF corresponds to a specific quantity of the underlying silver, making silver ETFs a convenient option for investors wanting to own physical bullion without the hassle of insuring and storing the metals themselves. Note that these ETFs hold silver or silver futures, not stocks of companies which mine for silver.

Key Takeaways

  • Silver ETFs significantly outperformed the broader market over the past year.
  • The ETFs with the best 1-year trailing total returns are USV, SIVR, and SLV.
  • The only holding of each of these ETFs is silver.

The silver ETF universe is comprised of 4 ETFs that trade in the U.S., excluding inverse and leveraged ETFs. Silver futures have dramatically outperformed the market in the past year, with a 1-year price change of 32.3% as compared with a 1-year total return of 14.0% for the S&P 500.  The best performing silver ETF is the E-TRACS UBS Bloomberg CMCI Silver ETN (USV). Below, we look at the top 3 silver ETFs as measured by 1-year trailing total returns. Performance figures above are as of November 4; all other numbers in this story are as of November 7, 2020.

ETFs with very low assets under management (AUM), less than $50 million, usually have lower liquidity than larger ETFs. This can result in higher trading costs which can negate some of your investment gains or increase your losses.

E-TRACS UBS Bloomberg CMCI Silver ETN (USV)

  • 1-Year Trailing Total Returns: 55.1%
  • Expense Ratio: 0.40%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 1,053
  • Assets Under Management: $1.4 million
  • Inception Date: April 1, 2008
  • Issuing Company: UBS

USV is an ETN that tracks the UBS Bloomberg CMCI Silver Total Return index, which measures returns from a collateralized basket of silver futures contracts diversified across maturities ranging from 3 months to 3 years. Because it is exposed to futures contracts, USV is subject to risks such as backwardation and contango. The single holding of USV is silver. Investors should take note that USV's AUM is extremely small, which can pose special challenges.

Aberdeen Standard Physical Silver Shares ETF (SIVR)

  • 1-Year Trailing Total Returns: 48.9%
  • Expense Ratio: 0.30%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 1,171,714
  • Assets Under Management: $782.2 million
  • Inception Date: July 24, 2009
  • Issuing Company: Aberdeen Standard Investments

SIVR is structured as a grantor trust, physically backed by silver bullion and coins held in a vault on behalf of investors. Because it holds only physical silver, this fund does not utilize futures contracts. Like other silver ETFs, while SIVR may be a useful safe haven during market uncertainty, it may not be attractive as a long-term, buy-and-hold investment. The single holding of SIVR is silver.

iShares Silver Trust (SLV)

  • 1-Year Trailing Total Returns: 48.7%
  • Expense Ratio: 0.50%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 44,423,016
  • Assets Under Management: $13.5 billion
  • Inception Date: April 28, 2006
  • Issuing Company: iShares

Like SIVR, SLV is a grantor trust holding physical silver on behalf of investors. Given that it does not utilize futures contracts, the fund is not subject to backwardation or contango. Like SIVR, it is likely best used as a safe haven during market turbulence. The single holding of SLV is silver.