Exchange-Traded Funds (ETFs) are an excellent way for people to invest in a variety of spaces like bonds, derivatives, and commodities.
Investing in a commodity’s ETF allows you to benefit from its market movements without owning the commodity itself. I have written about the best ETFs in Canada, but I wanted to focus on a particular area today: Silver.
If you’re looking to leverage the value of silver, there are ETFs that focus on the silver bullion, silver futures contracts, and even the silver-mining market. Now might be an ideal time to hedge your bets against inflation by investing in silver ETFs as the markets become more volatile.
I will discuss five of the best silver ETFs in Canada that you can consider adding to your portfolio to meet your investment needs.
What is a Silver ETF?
A silver ETF invests in silver assets that are held in trust by the fund manager or custodian. Silver ETFs allow each share represented by the fund the specific right to a quantity of silver that’s measured in ounces.
These ETFs aim to track the price of silver on the open market as closely as possible. The best silver ETFs can allow you better liquidity instead of holding the physical silver bullions due to the ease with which you can trade the ETFs on the stock market.
As the stock market becomes more volatile, investing in silver ETFs can allow you to protect and grow your capital without losing your liquidity.
In my list of the best silver ETFs, I will take a quick look at some of the top ETFs linked to the rare metal that you can consider investing in to track various aspects of the precious metal.
The 5 Best Silver ETFs in Canada
Note that most of the ETFs below include U.S ETFs as well, as there aren’t very many silver ETFs traded on the TSX.
1. Horizons Silver Trust ETF
Dividend Yield: –
Assets Under Management: $30.6 million (November 5, 2020)
Horizons is a major provider of ETFs in Canada, and I think the list of the best silver ETFs in Canada would not be complete without its silver ETF. The Horizons Silver Trust ETF was established in June 2009. The ETF seeks to track the performance of the Solactive Silver Front Month MD Rolling Futures Index ER.
Horizon Silver Trust ETF is denominated in Canadian dollars. It means that any US dollar gains or losses as a result of the trust’s investments will be hedged back to the Canadian dollar, to the best of the trust’s ability.
2.iShares Silver Trust ETF
Ticker: ARCA:SLV (USD only)
Dividend Yield: –
Assets Under Management: US$13.8 billion (November 5, 2020)
iShares Silver Trust ETF is one of the best silver ETFs that you can consider. The Trust is not a typical investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. It means that the iShares Silver Trust ETF shares are not subject to the regulatory requirements as mutual funds are in Canada.
With the conditions aside, iShares Silver Trust is an attractive option because it tracks the London Bullion Market Association silver price as its benchmark. The trust holds silver bullion, and it holds 17,462.08 tons of silver as of November 5, 2020.
3. Sprott Physical Silver Trust ETF
Ticker: ARCA:PSLV (USD only)
Dividend Yield: –
Assets Under Management: US$2.3 billion (November 5, 2020)
Sprott Physical Silver Trust ETF is another atypical silver ETF in my list of the best silver ETFs. It focuses on catering to investors who prefer holding physical ounces of the precious metal. The silver stocks held by this trust are stored in Canada at a secure third-party location. If you are an investor holding a particular dollar value of its shares, you can redeem your units in exchange for actual silver each month.
Sprott Physical Silver Trust ETF invests only in London Good Delivery physical silver bullion, and it can deliver silver almost anywhere in the world through armored carriers.
4. Global X Silver Miners ETF
Ticker: ARCA:SIL (USD only)
Dividend Yield: 1.13%
Assets Under Management: US$1 billion (November 4, 2020)
As its name suggests, Global X Silver Miners ETF provides investors with exposure to the silver mining industry. The ETF could be a valuable investment to consider during periods of high market volatility due to the increasing valuation of safe-haven assets. The ETF benefits from the increasing profits of silver mining companies when the value of the precious metal is increasing.
The ETF provides you with exposure to a comprehensive basket of silver mining companies worldwide. That allows investors a significant level of protection compared to owning shares of individual companies. It provides them with a geographically diversified silver ETF for their portfolio.
5. ETFMG Prime Junior Silver ETF
Ticker: ARCA:SILJ (USD only)
Dividend Yield: 0.79%
Assets Under Management: US$426 million (November 5, 2020)
The last entry on my list of the best silver ETFs in Canada is the ETFMG Prime Junior Silver ETF. This fund claims to be the first and only ETF that targets small market cap silver mining companies. The fund seeks to mirror the price and yield performance of the Prime Junior Silver Miners & Explorers Index before fees and expenses.
The Prime Junior Silver Miners & Explorers Index is essentially a benchmark for investors who are interested in tracking a globally diversified portfolio of small market capitalization silver companies. The fund’s investments span the US, Canada, and the UK.
How to Buy Silver ETFs in Canada
There are several ways you can invest in Silver ETFs in Canada, but I personally use the discount broker Questrade.
If you are looking to invest in silver without owning silver itself, investing in the best silver ETFs could be ideal for this purpose. I hope you enjoyed reading about the list of the best silver ETFs in Canada.
Do you think I missed out on any that you feel should be here? Let me know in the comments below.