Proving the Market’s ‘Mettle’ With This ETF

At this point, market fluctuation and volatility seem to be a given, but many intrepid investors are ready to prove the market’s mettle.

Put simply, investors are looking to prove the market’s tenacity in the face of seemingly unending rate hikes and inflation. So, while investors may still have hope for the rollercoaster of a market, they may not necessarily want to throw all their eggs in one basket, so to speak.

But, when they do throw those eggs in, they want the hard-boiled ones — the sturdy ones. And, in some situations, those eggs may be of the precious metals’ variety.

Precious metals can offer unique inflationary protection, as they have an intrinsic value, carry no credit risk and cannot be inflated. Now, since there is a finite amount of them, hence the uninflatable part, they can be a rather expensive investment. That is where today’s exchange-traded fund (ETF) enters the picture.

Meet abrdn Physical Silver Shares ETF (NYSE: SIVR), a physically backed silver ETF and silver’s less expensive alternative. The fund tracks the price of physical silver bullion – which refers to silver that is 99.9% pure and often comes in the form of silver bars.

SIVR holds physically allocated silver bullion, which is stored in vaults and audited twice a year. As of March 21, the ETF held 46,947 bars with its custodian JPMorgan Chase & Co., which represents roughly 45.7 million ounces of silver.

Shares of this ETF are intended to establish a simple and cost-effective means of making an investment like that of one in silver — sans the cost and complication of investing in true physical silver.

“Physically backed silver ETFs like SIVR offer three significant advantages over other types of silver investments: transparency, liquidity and convenience,” said Sean August, chief executive officer of The August Wealth Management Group.

For all its potential advantages, SIVR has an incredibly reasonable expense ratio of 0.30%, along with net assets of $1.11 billion and assets under management of $1.17 billion.

With the virtue of tenacity being served up on today’s silver platter, it’s hard not to appreciate the chart below that displays SIVR’s year-to-date performance — which is actually up 5% from this time last year.

While the ETF has had its fair share of ups and downs, it’s not alone in that. Yet, what does set it apart, is its strong performance over the last two months, and specifically its strength this month. As of Wednesday, April 26, SIVR opened at $23.97, which is incredibly close to its high of $24.21.

Courtesy of Stockcharts.com.

So, while SIVR is not the exact equivalent of an investment into true physical silver, it provides investors with an alternative that still allows a level of participation in the silver market through the securities market.

As a true Renaissance Man may say: Mettle makes the man. And SIVR may make a wise portfolio addition.

However, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.