Two ProShares silver ETFs that offer investors double exposure to the spot price of silver both ended Wednesday's and Thursday's sessions at least 20 percent away from their net asset values, according to data compiled by IndexUniverse.
The ProShares UltraShort Silver ETF (NYSEArca:ZSL), a double-exposure bearish fund, ended Thursday at a 20.35 percent premium, while the ProShares Ultra Silver ETF (NYSEArca:AGQ), a double-bullish security, ended Thursday's session at a discount of more than 27 percent. On Wednesday, ZSL was at a 19.8 percent premium and AGQ was at a 20 percent discount.
Silver is in the midst of a large correction that, at its sharpest, chopped off almost a third of the precious metal's value. The iShares Silver Trust (NYSEArca:SLV), a popular physical ETF, was trading Friday at $33.37, about unchanged on the day, but 31 percent below its peak of $48.35 reached in late April. The silver sell-off was part of a broad pullback in commodities that also pulled crude oil below $100 a barrel for the first time in weeks.
One ETF trader was quick to say that the fact that ZSL and AGQ are trading so far away from NAV is "no isolated event," given the recent volatility in silver markets.
Both ETFs are based on the U.S. dollar fixing price for spot delivery in London.
ProShares Chief Executive Officer Michael Sapir noted that it's important for investors to gauge performance of the two ETFs by looking closely at the London fix price of silver, which is set at noon London time, or 7 a.m. Eastern Time.
"If you do that, you'll see that these funds do what they are supposed to," Sapir said in a prepared statement. "For instance, from 7:00 a.m. to 4:00 p.m. (on Thursday), silver was up 5.06 percent. From their 7:00 a.m. NAV, AGQ was up 10.03 percent ZSL was down 10.25 period in that period," Sapir said.
Looking at the Wednesday to Thursday period, Sapir said:"Taking a full day as an example, from 7:00 a.m. May 11, to 7:00 a.m May 12, silver was down 17.05 percent. Based on their NAV, AGQ was down 34.09 percent and ZSL was up 34.12 percent," the ProShares executive said.
Top 10 Highest Premiums
ProShares UltraShort Silver
Market Vectors China
UBS E-TRACS CMCI Short Platinum Excess Return ETN
iPath Pure Beta Copper ETN
iPath Dow Jones-UBS Natural Gas Total Return ETN
iPath Pure Beta Aluminum ETN
ProShares UltraShort Telecommunications
ETFS Physical Silver
ProShares Ultra MSCI Mexico Investable Market
Bottom 10 Lowest Discounts
ProShares Ultra Silver
Grail RP Growth
UBS E-TRACS CMCI Silver Total Return ETN
Grail McDonnell Intermediate Municipal Bond
iPath Long Extended Russell 1000 TR ETN
TDX Independence 2020
ProShares UltraShort MSCI Pacific ex-Japan
iPath Pure Beta Broad Commodity ETN
ProShares Ultra KBW Regional Banking
TDX Independence 2010
Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.
Copyright ® 2011 Index Publications LLC . All Rights Reserved.