White Bank's stock surge hits a new all-time high: How can Taiwanese retail investors leverage ETFs for their布局?

Silver prices are experiencing a historic surge. Benefiting from expectations of Fed rate cuts, global supply chain tensions, and silver being officially included in the US critical minerals list, London spot silver broke through the psychological level of $60 per ounce on December 9, 2025, subsequently hitting new highs up to $64.6/oz. Since the beginning of the year, silver has increased by over 100%, outperforming gold (about 40%) and the Nasdaq index (about 20%).

UBS Group has even raised its 2026 target price to $58-60/oz, hinting at a possible touch of $65/oz. During this rally, Silver ETFs have become the preferred tool for many retail investors in Taiwan. Compared to buying physical silver bars or participating in futures trading, ETFs offer lower barriers to entry and more convenient operation.

What is a Silver ETF? Why is it suitable for beginner investors?

A silver ETF is essentially an investment fund that tracks the price of silver, allowing investors to participate in silver price fluctuations without holding physical silver. Like stocks, silver ETFs are listed and traded on securities exchanges, offering high liquidity and the ability to buy and sell at any time.

Compared to physical silver, the biggest advantage of ETFs is “no storage costs.” Physical silver requires paying annual fees of 1-5% for safe deposit box rental or storage, and carries risks of theft, damage, and oxidation. Additionally, buy-sell spreads for physical silver can reach 5-6%, and trading can be cumbersome. In contrast, silver ETFs are traded through securities accounts, with transparent costs and far superior liquidity, making them especially suitable for investors with limited capital or those who do not want to bear management burdens.

How ETFs Work

Silver ETFs track silver prices mainly through two methods: holding physical silver bars or investing in derivatives such as silver futures contracts. When silver prices rise by 5%, the ETF’s net asset value (NAV) theoretically also increases by about 5%; vice versa. This direct correlation means that investors’ returns and risks are entirely dependent on silver price movements.

Mainstream Silver ETF Products Analysis

There are about 7 silver ETFs commonly accessible to Taiwanese investors, each with its own features:

Tracking physical silver

SLV (iShares Silver Trust) is the largest silver ETF globally, launched in 2006, managed by BlackRock, with a net asset value exceeding $30 billion. The fund holds physical silver, stored by JPMorgan Chase, and is passively managed with an expense ratio of only 0.50%. It tracks the LBMA silver fix price, with the strongest correlation to spot silver prices, making it ideal for long-term investors.

PSLV (Sprott Physical Silver Trust) is a closed-end fund with about $12 billion in assets, notable for allowing investors to redeem physical silver (i.e., take delivery). Its expense ratio is 0.62%. However, its trading price often deviates from NAV due to market supply and demand, resulting in premiums or discounts, with higher short-term volatility.

Futures-based products

DBS (Invesco DB Silver Fund) tracks COMEX silver futures, with an expense ratio of 0.75%, suitable for investors seeking precise futures price tracking.

AGQ (ProShares Ultra Silver) offers 2x leverage, aiming for double the daily silver price gains, with an expense ratio of 0.95%. Be aware of compounding decay; only suitable for short-term trading, not long-term holding.

ZSL (ProShares UltraShort Silver) provides -2x inverse leverage, suitable for bearish views on silver or hedging risks, with an expense ratio of 0.95%, also limited to short-term operations.

Mining-related funds

SLVP (iShares MSCI Global Silver and Metals Miners) invests in global silver mining companies, tracking the MSCI Select Silver Miners Index, with a low expense ratio of 0.39%. In 2025, this type of mining ETF surged by 142%, far exceeding the 103% increase in spot silver, demonstrating leverage effects. However, it also exhibits higher volatility, with performance influenced not only by silver prices but also by mining company operations, costs, and policy risks.

Taiwan-listed products

Fubon Silver Futures ETF (00738U) established in 2018, invests in COMEX silver futures, issued at 20 TWD, tracking the Dow Jones Silver Excess Return Index, with an expense ratio of 1%. It is rated as “high volatility,” suitable for experienced investors.

Physical Silver vs. ETF vs. Futures vs. Mining Stocks: Investment Comparison

How Taiwanese Investors Can Purchase and Cost Comparison

Cross-border Trust: Safe but higher fees

Via domestic brokers (Fubon, Cathay, Yuanta, Mega, etc.) executing orders through overseas brokers.

Advantages: Regulated by FSC, Chinese interface, funds stay in Taiwan, tax assistance, beginner-friendly with low thresholds
Disadvantages: Higher commissions, limited tradable products, slower execution

Opening Accounts with Overseas Brokers: Lower costs but self-managed

Open accounts on platforms like Interactive Brokers, Charles Schwab, etc.

Advantages: Very low commissions (many fee-free or fixed low fees), wide range of products, support for advanced tools
Disadvantages: English interface, self-handling of remittances and taxes (e.g., 30% withholding on US dividends), weaker legal protections for cross-border funds

Tax Costs Cannot Be Ignored

Taiwan-listed silver ETFs (e.g., 00738U): Buying is tax-free, selling incurs only 0.1% tax, lowest cost.

Overseas silver ETFs: Profits are considered overseas income. Total annual gains ≤ NT$1 million are exempt from minimum tax; exceeding that, the full amount is included in taxable income at 20%, after deducting NT$7.5 million exemption.

Core Risks of Investing in Silver ETFs

1. Silver price volatility far exceeds gold and stocks

Although up over 100% in 2025, historically, sharp corrections over 50% are common, with short-term losses being significant and potentially stressful.

2. Tracking errors and fee erosion

Futures-based ETFs may underperform spot silver over the long term due to rollover costs. Physical ETFs have low fees (0.4-0.5%) but still erode returns over time.

3. Exchange rate and geopolitical risks

Silver prices are affected by industrial demand (solar, electronics), geopolitical tensions, monetary policies, etc., making them hard to predict. Overseas ETFs also expose investors to FX risk with the Taiwanese dollar.

4. Interest coverage ratio and portfolio management

Investors should assess their cash flow and debt levels (e.g., interest coverage ratio) to ensure sufficient liquidity for daily expenses and debt obligations, avoiding forced liquidation at a loss.

Conclusion: Diversify and Review Regularly

Silver ETFs are effective tools for participating in precious metals investment, offering liquidity, trading convenience, and low barriers. However, different ETF products vary significantly in fees, tracking accuracy, and leverage features.

Recommended strategies:

• Choose based on risk appetite (conservative investors opt for SLV; aggressive investors may consider AGQ or mining ETFs)
• Diversify holdings to avoid over-concentration
• Regularly review positions and market changes
• Evaluate personal interest coverage ratio to maintain sufficient cash flow
• Be mindful of tax costs and FX risks

In the current environment of a clear silver uptrend with increased volatility, rational risk assessment and selecting suitable investment tools aligned with personal risk tolerance are the best approaches.