Sprott Physical Silver Trust (NYSEArca: PSLV)
, a closed-end fund that lets investors redeem large blocks of
shares in exchange for delivery of silver bullion, is trading at a
nearly 20% premium.
The $1 billion silver trust closed lower on Monday while trading
volume jumped. It was down 5% in early trading Tuesday as silver
Sprott Physical Silver Trust often trades at a premium to net
asset value (
). Closed-end funds can see large premiums and discounts, while
exchange traded funds (ETFs) such as
iShares Silver Trust (NYSEArca: SLV)
have an arbitrage feature that tends to keep prices much more in
[Silver ETFs See Performance Diverge on
Sprott Physical Silver Trust traded at a premium of 18.2% on
Monday, according to backer Sprott Asset Management LP of
The fund has an unusual tax benefit, The Wall Street Journal
reported. Sprott recently filed to lift the sale restrictions on
the 26% of the fund's shares that the manager purchased for its own
accounts when it opened last November, WSJ's Jason Zweig wrote.
"Until now, those shares have been held off the market by chief
executive Eric Sprott and several affiliates of the firm,"
"However, now that the registration has been filed with the SEC,
they can be sold at any time, which would increase the number of
the fund's shares available to trade and could depress the
Full disclosure: Tom Lydon's clients own SLV.