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Silver ETFs

 
Average returns in this Category 3 months
return 		6 months
return 		12 months
return 		YTD
return
 
Silver ETFs 22.09% 28.28% 36.48% 53.08%
 
 
 
 
 
Ticker
SPY
Name 3 months
return
6 months
return
12 months
return
YTD
return
 
USV E-TRACS CMCI Silver ETN 18.79% 28.44% 52.41% 55.63%
LSIL ETFS Leveraged Silver ETF 37.24% 55.81% 77.85% 112.15%
PHAG ETFS Physical Silver ETF 56.22% 56.22% 32.59% 91.37%
PHSP ETFS Physical Silver Sterling ETF 7.6%     0%
SSIL ETFS Short Silver ETF -16.16% -26.75% -50.43% -41.9%
SLVR ETFS Silver ETF 17.14% 26.97% 52.95% 53.89%
SLV iShares Silver Trust ETF 19.31% 29.01% 53.49% 47.32%
AGQ ProShares Ultra Silver ETF 34.46% 43.79%   86.79%
ZSL ProShares UltraShort Silver ETF -38.23% -55.01%   -68.99%
           
 
 
 
  About Silver ETFs  
Silver ETFs Overview and forecast

Silver ETFs are getting popular, and a few new ones have just listed in late May 2009 in London. The silver industry has been spruiking its wares for a while, including some rather dubious quality predictions, for years, but the Silver ETFs are apparently getting some traction in what has been a pretty skeptical, not to say wary, market. Silver, as the poor cousin of gold, hasn't been all that popular, although the industry does maintain a respectable production and turnover in jewelry and other areas.








Silver is a particularly touchy commodity. It has a lot of industrial uses, and applications in a range of industries, but it's never been seen in the same class as the other precious metals. The industry's iffy efforts to talk the price up haven't helped, but silver is slowly coming into its own as a commodity, thanks to rising demand in economies like India and China. It's become a plausible investment demographic on that basis.

The recent popularity has been created by an existing market for the Silver ETFs. An ETF which has been on the market since April 2006 is iShares Silver Trust ETF (Amex:SLV) which has been selling in the millions of units since inception. That volume of trade has encouraged the creation of the new ETFs. A look at our chart http://www.etftips.com/SLV is a good indicator of the volumes and margins SLV operates.

Short term (6 months)

Commodities of any kind are prone to moments of major activity and periods of flat performance, and silver's performance for the years 1995- 2005 was nothing less than pitiful. It didn't really start performing until mid 2006, performed well up to July 2008 and followed the world in a steep dive to November 2008, where it hit its 2006 lows briefly, before reaching back to its averages for 2006- 2007.

If that suggests that trading in silver has some hairpin bends, it does. It has to be said from the outset that this is a highly mobile trading market. Short term views have to be based on trading realities, not trends, cycles, or reading crystal balls. Silver is a potentially good earner. The Silver ETFs have been doing some good short term business, but you can't invest on auto pilot in the short term, and there are no passive positions.

Medium term (2 years)

Nobody in their right mind would consider the medium term outlook for silver as much more than a possible upside. This metal was at one point one of the great under- performers of the commodities markets. Silver has shown an ability to fly like a house brick, straight up and straight down, over the last decade, in medium terms. The Silver ETFs do rate consideration as a spread across the precious metals, and the bursts of life in the silver market do give good returns, but it's not like there's nowhere else to invest. Any investment should be made in anticipation of either good trading environments, or a reasonable position based on the low points.

Long term (5 years)

Five years seems to be the actual long view, regarding silver. Even if its inglorious past is behind it, in terms of prices, the apparent movement is a gradual appreciation, over the 2005- 2009 period. This may indicate a natural development, based on increased demand from China and India, a sign of the rising global market.

The Silver ETFs do represent a way of accessing that market effectively. A spread of Silver ETFs over the various forms of investment methodology would have done fairly well, in that time frame. Past performance is definitely no indicator of future performance, in commodities, and least of all silver, but the Silver ETFs rate consideration in terms of their potentials.

Qualifiers to projections

Speculation in commodities is generally and rightly despised by professional investors. Bubbles and hype are bordering on fraud, in some cases. Silver was the unfortunate recipient of years of talk trying to raise its prices, and the result was an average price so flat you could have ironed your shirt with it. As a prime example of how not to improve the credibility of a commodity, it would have won first prize.







Talk is absolutely worthless, not just cheap, regarding commodity prices. Investors should work on hard facts and returns, and nothing else, in relation to silver. There's nothing wrong with the Silver ETFs or their methods. Silver is finally starting to look like it's outgrown its shoddy image. The fact remains that as a low cost commodity, it does have a real upside.
 
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Last Updated on: 2010-01-14 02:03:40
 
 
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