ETF Securities, the exchange-traded fund firm that began U.S.
rollouts of its physical metal ETFs about a year ago, decided to
hold the price of its ETFS Physical Silver Shares ETF
(NYSEArca:SIVR) 40 percent below that of its arch rival for at
least another year to help asset-gathering efforts.
SIVR, which launched on July 24, 2009, now has about $178
million in assets. ETFS is keeping in place the 0.30 percent price
it calls a discount from a cap of 0.45 percent described in
regulatory filings. By comparison, the iShares Silver Trust ETF
(NYSEArca:SLV), which costs 0.50 percent a year, has assets of
$5.35 billion. Both funds offer investors ownership of physical
silver that's stored in vaults.
"We decided that we'd extend that period of discounting for
another year to see if there's further asset growth," said Fred
Jheon, managing director of product development at ETF Securities.
"If it makes a difference, we'll continue the discount, and if
there's not a difference, we do have a right to raise it back to 45
ETF Securities' decision is the latest sign of price competition
in the world of metals ETFs. Last month, iShares cut the price on
its Comex Gold Trust (NYSEArca:IAU) by more than a third,
undercutting both the SPDR Gold Shares ETF (NYSEArca:GLD) and ETF
Securities' Physical Swiss Gold Shares (NYSEArca:SGOL). IAU costs
0.25 percent, versus 0.40 percent and 0.39 percent for GLD and
Asked if ETFS might make the SIVR silver fund's expense rate
0.30 percent permanently, Jheon said it was a possibility, but not
"We might do that," Jheon said. "But we're still the new kids on
the block in terms of the ETF space here in the U.S., and it takes
time for people to know us, know our products and ultimately use
"If we see continued asset growth in a year, it may be we'll
just cap it at 0.30," he added.
Silver Heating Up?
Coincidentally, silver ETFs have been among the top performers
recently as anxiety mounts about the durability of the U.S.
SIVR was the fifth-best performing ETF yesterday, rising 1.52
percent, according to data compiled by IndexUniverse.com. The ETF
has gained almost 5 percent in the past month as investors fret
about persistent unemployment and the threat of deflation.
SLV meanwhile was eighth on Monday's best-performers list, with
a 1.47 percent gain, IndexUniverse.com data show.
Silver, like gold, constitutes a safe-haven role in investors'
portfolios. But unlike gold, it has broad industrial uses in
electronics, jewelry, aerospace and battery technologies that tie
its performance to economic growth.
ETF Securities, which has offices in New York and London, has
platinum and palladium ETFs in addition to SIVR and SOGL. The ETFS
Physical Platinum Shares ETF (NYSEArca:PPLT) and the Physical
Palladium Shares ETF (NYSEArca:PALL) also offer investors ownership
of physical supplies of the commodities that are stored in vaults.
Don't forget to check IndexUniverse.com's ETF Data
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