ETF Spotlight: iShares Silver Trust (SLV)

ETF Spotlight on iShares Silver Trust (NYSEArca: SLV), part of a weekly series. Assets: $3.9 billion

Holdings: SLV holds silver bullion. The trust accepts silver that meets the London Good Delivery Standards. Each bar must contain between 750 ounces and 1,100 ounces

Objective: SLV seeks to track the price of silver owned by the iShares Silver Trust, minus expenses and liabilities. The fund is structured as a grantor trust and there is no index involved.

What’s Good

• Before exchange traded funds (ETFs), most retail investors were restricted to investing in silver via mining stocks and precious metals mutual funds
• Silver ETFs are a simple and cost-effective way to gain exposure to the silver market
• ETFs that hold physical securities simplify silver investing by removing the cost of having to find storage for the commodity
• SLV issues and redeems baskets of shares (one basket is 50,000 shares), which are only issued or redeemed for an equal value of silver; no shares are issued until the custodian has a corresponding amount of silver, according to an iShares FAQ

The Latest News

• Silver may continue its slow and steady rise to commodity hot shot as industrial demand continues;
• A faltering U.S. dollar mixed with high oil prices can give silver a safe-haven appeal;
• Silver, known as “the poor man’s gold” can have a role as an inflation hedge, too;
• The general perception of silver may eventually move more in line with reality;
• As much as 75% of silver’s production comes from gold, copper, lead, and zinc mining, which is why changes in these other industries have a large impact on the price of silver; company stocks have been on the rise, reports Daily Futures on Commodity Online