Both SLV and SIVR are bullion-backed silver ETFs – the funds’ shares represent a physical holding in silver bars stored in London, U.K. bank vaults. Potential investors should be aware that physically backed ETFs are taxed as collectibles at a rate of 28% instead of long-term equity rate of 15%.
Silver bullion prices are affected by a weakening U.S., and the global silver ETFs also enjoy the positive forex effects of a depreciating greenback – a strengthening foreign currency means that returns are augmented when converted to a weaker U.S. dollar.
However, potential investors should be aware that a strengthening dollar could contribute to a significant pullback in both precious metals and related miner assets.
“You don’t need to speculate over supply and demand for silver as a commodity. The well-informed, educated, and highly-paid staffs at the MM firms have already done that, and their expectations are baked into the hedging deals agreed on by experienced pros, vetted by competition in sophisticated, active markets,” adds Seeking Alpha.
For more news and strategy on the Currency ETF market, visit our Silver category.
ProShares UltraShort Silver ETF