After peaking in April of 2011, silver prices have had trouble
regaining their lofty levels. The white commodity has instead
briefly flashed above the $04/mark in the late summer of 2011
before returning to a level around the $25/oz. range.
While the metal appeared to be back on track to start 2012, this
soon dissipated as the dollar strengthened in the face of European
woes and investors shunned commodities for stocks once more.
However, this trend appears to be reversing yet again as silver
prices have taken off in recent weeks and have finally breached the
$30/oz. level for the first time in months (also see
Platinum ETF Investing 101
).
This recent bullish trend in the silver market is undoubtedly
driven by the Federal Reserve. The central bank seems poised to
initiate another round of QE in hopes of boosting sagging growth
levels, although many believe that this will curtail the dollar's
value and boost precious metals in the process.
Furthermore, although the metal is more impacted by industrial
events than its cousin gold, the metal is also more volatile due to
its more ubiquitous nature and lower price point. This has allowed
silver to greatly outperform gold in recent weeks and the trend
could continue in a bull market phase for precious metals, making
silver an intriguing choice at this juncture (read
Silver ETFs Outshine Gold
).
In fact, a recent look at the ETF space reveals a very
interesting path for silver ETFs over the past few weeks. According
to data from
XTF.com
, of the top eight best performing non-leveraged ETFs in the past
month, five had a focus on silver.
This represents a pretty big reversal from many of these
products performances' over the trailing one year period in which
all were down more than 20% in the time frame. Potentially, it
suggest that a trend shift is underway in the silver market and
that it could especially move if Bernanke and Company authorize
another round of bond purchases before the year is over (read
The Five Best ETFs over the Past Five Years
).
For these reasons, it could be time for some investors to take a
closer look at the silver market once again. Clearly, Bernanke is
putting a floor underneath silver prices in the near term, and a
robust recovery seems quite unlikely at this point, suggesting that
more QE will probably be used sooner rather than later.
If investors are looking for an ETF approach, we have
highlighted six of the top performing ETFs in the space-which have
all added more than 13% in the last month-- briefly below. Any of
these options could be great picks for investors seeking more
silver exposure before more easing is inevitably unleashed on the
economy:
-
PowerShares DB Silver Fund (
DBS
) -
One of the top performing ETF with a focus on bullion, DBS
utilizes futures in order to achieve silver exposure. The fund
charges a somewhat high 79 basis points a year in fees and volume
is quite light, but it has managed to outperform in shorter time
periods (although this trend is reversed over longer time
frames).
-
E-TRACS UBS Bloomberg CMCI Silver ETN (
USV
) -
Although relatively unpopular, this silver ETN is actually the
best performing silver product over the trailing one month
period. The note has just edged out its peers putting up a gain
of roughly 19.4% in the time frame, although it should be noted
that trading volumes are quite low, suggesting wide bid ask
spreads.
-
Global X Silver Miners ETF (
SIL
) -
This Global X fund has been the best performing silver-focused
mining ETF over the past month, thanks in part to its equity
focus. The product charges investors 65 basis points a year in
fees but has 30 components in its basket, with Canadian firms
taking the top spot at 53% of assets (see
Time to Consider the Silver Miners ETF
).
-
iShares Silver Trust (
SLV
) -
This is easily the most popular silver ETF on the market today
with nearly $10 billion in assets and over 13 million shares
changing hands on a daily basis. The fund is in the middle of the
road for expenses, but the volume is unmatched, making it a solid
choice for traders seeking tight bid ask spreads.
-
iShares MSCI Global Silver Miners Fund (
SLVP
) -
This low cost choice in the silver mining space charges just 39
basis points a year in fees, but sees paltry volume levels and
wide bid ask spreads. However, the fund does provide similar
exposure to SIL at a lower cost, making it a potential
replacement for those unconcerned with low trading volumes and a
heavy concentration in the top securities (see more in the
Zacks
ETF Center
).
-
ETF Securities Silver Trust (
SIVR
) -
The cheapest ETF, bar none, in the silver market is this one from
ETF Securities which charges just 30 basis points a year in fees.
Volume is also pretty solid on this product while AUM is pretty
good as well. Additionally, the bullion is stored in secure
vaults in Europe where random audits and bar number lists are
present in order to give investors more peace of mind over their
investments.
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Long silver bullion
PWRSH-DB SILVER (DBS): ETF Research Reports
GLBL-X SILVER (SIL): ETF Research Reports
ETF-SILVER TRST (SIVR): ETF Research Reports
ISHARS-SLVR TR (SLV): ETF Research Reports
ISHARS-M GL SLV (SLVP): ETF Research Reports
E-TRC UBC SILVR (USV): ETF Research Reports
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