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%.
DBS, on the other hand, tracks silver futures contracts. Specifically, the ETF includes silver contracts that expire on January 27, 2017. Consequently, potential investors should be aware that the fund may come with a K-1 tax form. Additionally, since the ETF includes futures contracts, investors are susceptible to the effects of contango or backwardation in the futures market.
“The extreme market positioning previously discussed in the futures market has been correcting itself, and while speculative longs are still holding quite a large net long position, it’s not much larger than the one held prior to the April rally,” according to DailyFX.
For more information on the silver market, visit our silver category.
iShares Silver Trust