Silver hits a new all-time high, how should Taiwanese retail investors position themselves? A comprehensive analysis of ETFs and physical investments

Silver prices have been moving frequently lately, and this rally is remarkably fierce. Driven by expectations of Federal Reserve rate cuts, tightening global silver supply, and the U.S. government listing silver as a critical mineral, London spot silver on December 9th this year surged to over $60 per ounce, then continued to climb, reaching a historic high of $64.6 per ounce.

How impressive has silver performed this year? The increase has exceeded 100%, firmly making it the most eye-catching asset for 2025. In comparison, gold only rose about 40%, and the Nasdaq Composite Index’s gains lag far behind. Even top international investment banks like (UBS) are raising their silver target prices for 2026 to $58–$60 per ounce, with some not ruling out a breakthrough of $65.

In the face of this wave of silver investment enthusiasm, many Taiwanese investors are starting to consider how to enter the market. Silver ETFs have quickly become the first choice for retail investors due to their low barriers and flexible trading. But which one to choose? Should you go through a custodian bank or open an overseas account? How to calculate investment costs? How to handle taxes? These questions deserve careful review.

What is a Silver ETF? Why is it more attractive than physical silver?

Simply put, a silver ETF is an investment fund that tracks the price movements of silver. Its biggest advantage is that you can participate in silver market fluctuations without physically buying silver. Like buying stocks, it is listed on stock exchanges, allowing investors to buy and sell anytime during trading days, with flexible entry and exit.

Traditional physical silver investment sounds solid, but in practice, it involves many costs and hassles. First, storage issues—physical silver requires paying for safe deposit boxes or professional storage, with annual fees often ranging from 1-5%. Keeping it at home raises concerns about oxidation, theft, or damage. Buying and selling is also more complicated, needing trusted silver shops or precious metals dealers, with premiums and commissions of 5-6%, plus purity verification. When needing quick cash, liquidity is poor, and buyback prices at silver shops lack transparency.

In contrast, silver ETFs simplify all these troubles. You only need to open a brokerage account to buy and sell silver ETFs just like stocks, with much higher liquidity than physical silver. Most importantly, you don’t need to handle transportation, storage, or verification—these chores are managed by the fund manager, allowing you to focus solely on investment decisions.

How does ETF work? A one-minute overview

The core logic of silver ETFs is straightforward: replicate the returns of the silver market. To achieve this, ETF managers usually adopt two approaches—either directly holding physical silver bars or tracking silver prices through derivatives like futures contracts. Regardless of the method, the ETF’s net asset value (NAV) fluctuates in sync with silver prices. If silver rises 5%, the ETF value rises 5%; if silver falls, the ETF drops accordingly. This transparent linkage allows investors to clearly understand their silver holdings.

How to choose among the seven popular silver ETFs? Comparing fees, features, and risks

SLV’s story: This is the most well-known global silver ETF, launched by asset management giant BlackRock in 2006, with assets exceeding $30 billion. SLV tracks the LBMA silver benchmark price, mainly holding physical silver stored by JPMorgan Chase. Due to passive management, the fund rarely trades silver, only occasionally selling small amounts to cover operational costs, resulting in very small tracking errors.

Role of AGQ: Launched by ProShares in late 2008, this leveraged ETF is designed for short-term traders wanting amplified silver volatility. It tracks the Bloomberg Silver Subindex Daily Return multiplied by two, meaning if silver rises 10%, AGQ should theoretically rise 20%. But beware—leverage products decay over time due to compounding effects and rollover costs, so AGQ is only suitable for short-term trading, not long-term holding.

Use of ZSL: This is an inverse leveraged product providing -2x daily return of LBMA silver fixing. If silver drops 10%, ZSL should theoretically rise 20%. It’s designed for bearish traders or hedgers, only suitable for short-term use, not long-term.

Features of PSLV: Launched in 2010, this closed-end fund issues a fixed number of units, traded at market prices that can trade at a premium or discount to NAV. Its unique selling point is that investors can redeem units for physical silver, attractive for long-term bullish silver investors. Current assets are about $12 billion.

Complexity of SLVP: Launched by BlackRock in 2012, it invests in major global silver mining companies. Since it invests in stocks of miners rather than silver itself, it is affected by mining costs, government regulations, company operations, and other factors. Management fee is 0.39%, lower than the industry median of 0.5%, but historically, SLVP shows larger volatility, tracking errors, and wider bid-ask spreads, making it less attractive. However, in 2025, mining ETFs like SIL gained about 142%, far exceeding silver’s 103%, so if you believe mining companies can profit more from silver rises, SLVP is worth considering.

Local Taiwan option—Taiwan Dow Jones Silver ETF: Established in May 2018, initial price NT$20, opening at NT$19.86. Tracks the Dow Jones Silver Excess Return Index via COMEX futures. Rated as high volatility, no dividends, fee 1%. Suitable for Taiwanese investors who prefer local accounts and want to avoid international remittance hassles.

How can Taiwanese investors participate? Custodian banks vs. overseas brokers—what to choose?

Custodian channels—stable but costly

Most Taiwanese investors use custodian banks like Fubon, Cathay, Yuanta, or Fubon Securities to execute trades via overseas brokers.

Process: Open a custodian account online or in person, prepare ID and bank info, choose TWD or foreign currency settlement, then search for silver ETF codes like SLV on the broker’s platform to place orders. Many support regular fixed investments, suitable for small, periodic purchases.

Advantages: Regulated by Taiwan’s Financial Supervisory Commission, high security, tax issues like dividend withholding tax handled by the broker, funds stay within Taiwan.

Disadvantages: Higher transaction fees, limited trading products.

Overseas brokers—lower costs but more hassle

For more direct, cheaper investment, opening an account directly with an overseas broker is an option. Prepare passport, ID, proof of address, bank info, and fund transfer documents. For TWD, convert to USD first, then wire transfer to designated account, set up the account, and trade via their platform.

Advantages: Very low fees—many waive commissions or charge fixed low fees, wide range of products, support advanced tools like options and margin trading.

Disadvantages: English interface may be challenging, US dividends are subject to 30% withholding tax, tax refunds require self-application, funds transferred abroad involve security and estate considerations, complex procedures, no local legal protections.

Investment costs and tax planning: interest income exemption does not apply, but understand these

Tax planning for silver ETFs varies depending on listing location (Taiwan vs. overseas) and income type (capital gains vs. dividends). Most silver ETFs are commodity-type, tracking physical silver or futures, and generally do not pay dividends, so interest income tax exemptions do not apply.

Taiwan-listed silver ETFs like 期元大道瓊白銀 are treated as Taiwanese stocks, easiest to trade. Buying is tax-free; selling incurs a 0.1% transaction tax.

Overseas-listed silver ETFs like SLV, AGQ are considered foreign property transactions, included in overseas income. Tax thresholds: if total overseas income ≤ NT$1 million annually, no minimum tax; over that, all is included in basic income, which is taxed at 20% after deducting a NT$7.5 million exemption.

Silver ETF vs. physical silver bars vs. futures vs. mining stocks vs. CFDs—comprehensive comparison

From the table, the highest return in 2025 is expected from silver futures and mining stocks, but with the highest risks, requiring advanced knowledge. Silver ETFs, while offering lower returns, have no storage costs and relatively manageable risks, making them more suitable for beginners and small investors to quickly enter and exit the market.

Key risks and considerations for silver ETF investing

1. Silver price volatility far exceeds gold and stocks

Silver itself is highly volatile. Although it surged over 100% this year, history shows sharp pullbacks can occur, causing significant short-term losses. This means silver investing is more suitable for high-risk-tolerance investors rather than conservative, stable investors.

2. Tracking errors cannot be ignored

Futures-based ETFs incur rollover costs due to periodic contract expiration and rolling over to new contracts, which can reduce long-term returns below spot silver. Physical ETFs track more accurately but have annual fees of 0.4-0.5%, which gradually erode gains over time due to compounding.

3. Overseas ETFs face exchange rate and tax risks

Buying USD-denominated ETFs means TWD appreciation can offset some silver gains, and currency fluctuations impact final returns. Improper tax planning may lead to unnecessary tax burdens.

4. Silver prices are influenced by multiple factors

Silver is affected not only by monetary policy but also by industrial demand (solar, electronics) and geopolitical situations. Investors should be prepared for large swings driven by these factors.

Conclusion: How to smartly allocate in silver ETFs

From an asset allocation perspective, silver ETFs are effective tools for participating in silver markets. They avoid the storage and delivery hassles of physical silver, offer high liquidity and trading convenience, and are suitable for investors wanting exposure to silver’s upside without physical management costs.

Before investing, remember: silver prices are highly volatile, influenced by industrial demand and speculative sentiment. Different silver ETFs vary significantly in management fees, tracking methods, leverage, and physical holdings. Diversification and regular review of market conditions and positions are recommended to navigate this wave of silver investment and avoid pitfalls.