Investment options after silver prices hit a new high: How to get started with silver ETFs

Silver Prices Hit Record Highs Again, Investment Enthusiasm Continues to Rise

London spot silver prices have experienced a historic surge supported by multiple positive factors. Expectations of Federal Reserve rate cuts, global supply shortages, and the U.S. officially including silver in the critical minerals list have jointly driven silver prices to break the key level of $60 per ounce on December 9, 2025, subsequently soaring to a historic high of $64.6/oz. From the beginning of this year to now, silver has increased by over 100%, becoming the most outstanding asset class.

In comparison, this achievement not only exceeds gold’s gain by more than 60% but also clearly surpasses the approximately 20% performance of the Nasdaq Composite Index. International investment bank UBS has raised its silver target price for next year to the range of $58 to $60 per ounce, and even suggests the possibility of further climbing to $65/oz.

Amid this wave of investment, Silver ETFs have become the preferred participation method for many individual investors due to their low entry barrier and ease of operation.

How Silver ETFs Work

What is a Silver ETF?

A silver ETF is essentially an investment fund that tracks the price of silver, allowing investors to participate in silver price fluctuations and profit without holding physical silver. These funds are listed on exchanges in a securitized form, enabling investors to buy and sell just like stocks at any time.

Compared to traditional physical silver investments that require proper storage, silver ETFs are more convenient and highly liquid. They eliminate complex processes such as transportation, storage, and authentication, providing investors with a simple way to access the silver market.

How do Silver ETFs Track Silver Prices?

The core mechanism of silver ETFs is to replicate the performance of the silver market. To achieve this, funds typically adopt two strategies: directly holding physical silver bars or using derivatives such as futures contracts linked to silver prices.

The net asset value (NAV) of the fund is linked to the London spot silver price. For example, if silver prices rise by 5%, the ETF’s value will also increase by about 5%; conversely, it will decrease accordingly. This close correlation allows investors to accurately capture opportunities from silver price volatility.

Physical Silver vs. Silver ETFs

Investing in physical silver provides a tangible asset and a sense of security, but practical challenges exist. First, storage costs—whether stored in bank safes or professional vaults—must be paid annually; storing at home involves risks of oxidation, theft, or damage.

On the trading side, physical silver must be bought and sold through reputable silver shops or precious metals dealers, with spreads often around 5-6%, plus additional costs for purity certification. The biggest issue is liquidity—selling quickly in times of urgent need is difficult, and regional purchase prices lack transparency.

In contrast, silver ETFs tokenize physical assets, allowing investors to trade anytime via securities accounts, with much higher liquidity. They also eliminate storage concerns while closely tracking silver prices, making them a more efficient way to participate in the silver market.

Comparison and Selection of Silver ETF Products

Mainstream silver ETF products in the market each have their features, suitable for different investment styles:

Mainstream Product Details

SLV: Globally Recognized Stable Choice

As the largest silver ETF worldwide, SLV was launched in 2006 and managed by Blackrock, with assets exceeding $30 billion. The fund directly holds physical silver, custodied by JPMorgan Chase. It employs a passive management strategy, rarely trading to capture short-term fluctuations, only periodically selling small amounts of silver to cover operational costs.

Since 2014, SLV has tracked the LBMA silver benchmark price, ensuring high consistency with the spot market. Its 0.50% fee is highly competitive among physical silver products.

AGQ: Leverage Amplified Short-term Tool

Managed by ProShares, AGQ tracks silver prices via futures contracts aiming to achieve 2x the daily performance of the Bloomberg Silver Subindex. This means if silver rises by 10%, AGQ could theoretically increase by 20%, and vice versa.

Due to compounding effects and rollover costs, AGQ is suitable only for short-term trading and not recommended for long-term holding. Advanced investors can use it to amplify gains during rapid silver price increases but must set strict stop-loss levels.

ZSL: Inverse Leverage Hedge Tool

ZSL offers 2x inverse (-2x) daily performance of silver prices, suitable for bearish views on silver or hedging existing long positions. Its inverse leverage feature is also limited to short-term trading; long-term holding can lead to compounding losses.

PSLV: Unique Advantages of a Closed-End Fund

Launched in 2010, PSLV is a closed-end fund with fixed issuance units and market-determined trading prices, often trading at a premium or discount. Despite its structural peculiarities, it is favored for its pure physical silver exposure, with assets around $12 billion.

Investors can redeem physical silver by applying, which is attractive for long-term holders.

SLVP: Indirect Participation via Mining Stocks

Launched by Blackrock in 2012, SLVP passively tracks major global silver mining companies. Its 0.39% fee offers cost advantages, and it pays dividends semi-annually.

However, historical performance shows high volatility, tracking errors, frequent adjustments, and wider bid-ask spreads. Suitable for investors willing to accept high risk and pursue excess returns.

Quota Yuan Avenue JPY Silver ETF: Localized Choice

Established in 2018, this ETF tracks the Dow Jones Silver Excess Return Index using COMEX silver futures contracts. It does not distribute income and is rated as “high volatility,” more suitable for investors with higher risk tolerance.

Purchase Channels for Taiwanese Investors

Option 1: Discretionary Trust (Recommended for Beginners)

Using domestic brokers (e.g., Fubon, Cathay, Yuanta, Mega) to execute trades via overseas brokers is the main choice for Taiwanese investors.

Steps:

• Open a discretionary trust account with a domestic broker, prepare ID documents (ID card, passport)
• Choose TWD or foreign currency settlement
• Place orders via broker app or website for products like SLV; many platforms support regular fixed investments

Advantages: Regulated by the Financial Supervisory Commission, tax handled by the broker, funds do not need to be transferred abroad
Disadvantages: Higher transaction fees, limited tradable products

Option 2: Direct Overseas Broker Account (Advanced Investors)

A more direct approach is to open an account online with an overseas broker, saving intermediary costs.

Steps:

• Complete online registration, prepare passport, ID, proof of address
• Convert TWD to USD via bank transfer
• Search for codes like SLV to place orders

Advantages: Lower fees (many fee-free), wide range of assets, quick trading
Disadvantages: Mostly in English interface, need to handle remittance and taxes yourself, relatively weaker security and legal protections

Tax Considerations

Tax treatment for Taiwanese investors purchasing silver ETFs varies by product type:

Taiwan-listed Silver ETFs: Treated as domestic stocks, exempt from tax when buying; 0.1% tax on selling.

Overseas Silver ETFs: Gains from buying and selling are considered overseas property transactions, included in overseas income. If annual overseas income ≤ NT$1 million, no basic tax; exceeding NT$1 million, total is included in taxable income and taxed at 20%.

Comprehensive Comparison of Silver Investment Methods

Besides silver ETFs, investors can consider other channels, each with pros and cons:

Risks to Know When Investing in Silver ETFs

Price Volatility

Silver prices fluctuate far more than gold and stocks. Although this year’s gain exceeds 100%, historical data shows frequent large corrections, and short-term losses are possible. Suitable only for high-risk-tolerance investors.

Tracking Errors

Futures-based silver ETFs may underperform spot prices over the long term due to rollover costs. Even physical funds with annual fees of 0.4-0.5% gradually erode returns.

Currency and Tax Risks

Overseas ETF investors face USD/TWD exchange rate fluctuations and complex tax reporting. Silver prices are also influenced by geopolitical factors, industrial demand (solar, electronics), and central bank policies, requiring ongoing monitoring.

Conclusion

Silver ETFs are effective tools for asset allocation within precious metals. Compared to physical silver, they eliminate storage, transportation, and authentication hassles through securitization, offering liquidity and trading convenience. They are especially suitable for investors wanting exposure to silver price increases without the costs of physical management.

However, silver prices are volatile, and different silver ETFs vary significantly in fees, leverage, and physical holdings. Investors should diversify, regularly review market changes, and align positions to participate rationally in this silver rally.