Are you looking to invest in silver but don’t know where to start? As someone who is constantly on the lookout for investment opportunities, I understand the struggle. That’s why I’ve researched and compiled a comprehensive guide on the best silver ETFs in Canada.
Exchange-Traded Funds (ETFs) are an excellent place to start if you’re new to investing. They provide exposure to various assets, including stocks, bonds, and commodities like silver, without requiring a lot of capital.
In this article, I’ll share my top picks for the best silver ETFs in Canada, discussing their features and performances and providing some tips for making the most of your investment.
Whether you’re a seasoned investor or just starting, you can expect to find all the information you need to make an informed decision on investing in the best silver ETFs in Canada. So, let’s dive in and explore the exciting world of silver ETFs!
What Is a Silver ETF?
A silver ETF is an exchange-traded fund that tracks the price and performance of silver assets in the stock market. It provides exposure to silver without requiring you to own actual silver bullion. Instead, each share of a silver ETF represents a specified amount of silver in ounces. Investing in silver ETFs can maintain liquidity and safeguard your money during volatile market conditions.
Two ways silver ETFs gain exposure to the price of silver – physically through audited vaults of actual bullion or synthetically through silver futures contracts. Additionally, fluctuations in currency exchange rates can add volatility for non-currency hedged silver ETFs. As a result, some silver ETFs use derivatives called forwards to mitigate this risk at an extra cost.
As with all ETFs, silver ETFs charge fees, which include the fund manager’s management fees and any operational, administrative, and marketing expenses. These fees are a percentage fee deducted from your total investment annually, forming the ETF’s management expense ratio (MER). Keeping this cost as low as possible is always advisable.
Silver ETFs can be an excellent addition to your investment portfolio, providing diversification and protection against inflation.
6 Top-Performing Silver ETFs in Canada to Buy Right Now
With the increasing demand for silver as a commodity, these silver ETFs provide an excellent opportunity for investors to diversify their portfolios and potentially benefit from the rising silver prices.
Let’s explore the top-performing silver ETFs in Canada that investors should consider buying right now.
1. IShares Silver Trust ETF (ARCA:SLV)
- Inception date: April 21, 2006
- Investment: Physical silver
- AUM: $10 billion (As of January 16, 2024)
- Ticker symbol: SLV
- MER: 0.50%
The iShares Silver Trust ETF is a highly popular investment option for those looking to gain exposure to the silver market in Canada.
It offers investors exposure to the price of silver bullion through the use of futures contracts, which provides diversification and reduces the risk associated with investing in a particular company.
The ETF has a strong performance track record with a long-term return of over 4%, making it a solid choice for investors. Additionally, it has a low expense ratio and high liquidity, which makes it easy for investors to buy and sell shares.
Overall, if you’re looking to invest in silver ETFs in Canada, the iShares Silver Trust ETF is an excellent option to consider.
2. Sprott Physical Silver Trust ETF (TSE:PSLV)
- Inception date: October 27, 2010
- Investment: Physical silver
- AUM: $4.15 billion (As of January 16, 2024)
- Ticker symbol: PSLV
- MER: 0.58%
The Sprott Physical Silver Trust ETF is a physical silver ETF available in Canadian dollars on the TSX. It offers real metal exposure and allows investors to convert units for physical silver each month.
While lacking in total returns due to its establishment during the financial crisis, it is ideal for Canadian investors looking to hold physical silver.
The ETF is liquid, with over 3 million shares traded daily and held in custody with the Royal Canadian Mint. Investors can redeem their units for actual physical silver; the total fees are around 0.58%.
3. Horizons Silver Trust ETF (TSX:HUZ)
- Inception date: June 24, 2009
- Investment: Silver futures
- AUM: $26.22 million (As of January 16, 2024)
- Ticker symbol: HUZ
- MER: 0.79%
Horizons is a leading ETF provider in Canada, with its Horizons Silver Trust ETF being one of the best silver ETFs available in Canada.
The ETF aims to track the performance of the Solactive Silver Front Month MD Rolling Futures Index ER, with profits or losses of the US currency being hedged against the Canadian dollar.
While HUZ has a long performance track record, it is a small ETF by assets under management and comes with a relatively high management expense ratio. Horizons rates HUZ as a high-risk fund, and it is ideal for investors looking to invest in silver futures without trading the contracts themselves. However, HUZ is at risk of closing down early if it cannot attract enough assets under management.
4. Global X Silver Miners ETF (ARCA:SIL)
- Inception date: April 19, 2010
- Investment: Silver miners
- AUM: $971.62 million (As of January 16, 2024)
- Ticker symbol: SIL
- MER: 0.65%
The Global X Silver Miners ETF exposes investors to 40 silver mining companies, including Canadian miners like Wheaton Precious Metals and Pan American Silver.
However, few silver ETFs in Canada focus on miners, so investors may need to look to the US for significant exposure.
SIL aims to replicate the performance of the Soloactive Global Silver Miners Total Return Index and has over $1 billion in net assets. The ETF is highly liquid, with over 420,000 shares exchanging hands daily.
However, investors should be aware of the volatility of this ETF, which is vulnerable to major price changes and poor performance in bear markets. Consider investing in SIL if you believe it will rise going forward.
5. ETFMG Prime Junior Silver Miners ETF (ARCA:SILJ)
- Inception date: November 28, 2012
- Investment: Silver miners
- AUM: $709 million (As of January 16, 2024)
- Ticker symbol: SILJ
- MER: 0.69%
The ETFMG Prime Junior Silver Miners ETF is an ideal option for investors with high-risk tolerance seeking significant rewards.
It consists of small businesses focusing on silver mining and aims to reflect the performance of the Prime Junior Silver Miners & Explorers Index before fees and costs. However, junior silver mining ETFs are prone to large price fluctuations.
The ETF has underperformed silver prices due to the COVID-19 market collapse’s impact on junior miners. Despite this, it is one of Canada’s most active silver ETFs, covering Canada, the United States, and the United Kingdom.
The top holdings are mostly Canadian-listed stocks, including First Majestic Silver Corp, Pan American Silver Corp, Mag Silver Corp, Yamana Gold Inc, and Hecla Mining Company. Overall, this ETF exposes small-cap miners involved in silver exploration and production.
6. iShares Silver Bullion ETF (TSX:SVR)
- Inception date: July 15, 2009
- Investment: Silver bullion
- AUM: $95.90 million
- Ticker symbol: SVR
- MER: 0.66%
The iShares Silver Bullion ETF is a Canadian ETF that invests directly in physical silver and offers investors exposure to the price of silver bullion. It is available in both hedged and unhedged versions.
The fund’s silver bullion holdings are managed by CIBC Mellon Trust Company. Although it has a long performance track record and is a decently-sized ETF, it is more than twice as expensive as Purpose’s SBT ETF.
Due to its volatility, SVR does not provide investors with any income stream and is rated as a high-risk investment. Nonetheless, it can be a good option for investors seeking exposure to silver bullion.
Is Silver ETF a Good Investment?
Whether or not a silver ETF is a good investment depends on an individual’s investment goals, risk tolerance, and overall portfolio diversification.
Silver ETFs can be a good investment for those who want exposure to the price of silver without owning physical silver. They are also a convenient and cost-effective way to invest in silver compared to buying and storing physical silver.
However, it’s important to note that silver ETFs, like any investment, come with risks. Silver prices can be volatile, and the value of silver ETF shares can fluctuate accordingly. Additionally, some silver ETFs may be more heavily weighted towards certain silver mining companies or geographical regions, which can expose investors to specific risks associated with those companies or regions.
Investors should also carefully consider the fees associated with silver ETFs, as they can vary widely and impact returns over time.
In summary, a silver ETF can be a good investment for some investors. Still, it’s important to thoroughly research and consider personal investment goals and risk tolerance before making investment decisions.
RELATED: 12 Best Dividend ETFs in Canada For 2024
Physical Silver Vs Silver ETFs
Investing in physical silver and silver ETFs are two different approaches to gaining exposure to the price of silver.
Physical silver refers to the actual metal bought and owned by the investor, while silver ETFs are funds that invest in silver or silver-related assets.
Investing in physical silver provides direct ownership of the metal, which can be stored and traded as the investor sees fit. However, buying and storing physical silver can come with additional costs and risks, such as storage fees, insurance, and the risk of theft or damage.
Silver ETFs offer a more convenient and cost-effective way to invest in silver, as they can be easily bought and sold through a brokerage account and do not require the investor to store the metal physically. Some silver ETFs may also offer exposure to a diversified portfolio of silver-related assets, such as mining stocks or futures contracts.
Physical silver may be more suitable for those seeking direct ownership and control over their investment. In contrast, silver ETFs may appeal to those looking for a more convenient and diversified way to invest in silver.
RELATED: Penny Stocks Canada: Best 10 Picks That Can Make You Rich
What are the Types of Silver ETFs in Canada?
While there are different types of silver ETFs, it’s important to note that each type has its own unique characteristics and investment risks.
- Physical Silver ETF: These invest in physical silver bullion and aim to track the price of silver. This type of ETF can provide direct exposure to the underlying commodity but may not produce high yields on investment.
- Equity Silver ETF: These invest in the stocks of silver mining companies. This type of ETF can provide exposure to the earnings of small mining companies when the value of precious metals increases. However, equity ETFs carry the risks associated with investing in individual stocks, such as company-specific risks.
- Futures Silver ETF: These invest in futures contracts to predict the price movement of silver. This type of ETF is most often available to government and institutional investors, as it requires knowledge and expertise in futures trading. Futures ETFs can offer exposure to silver price movements but also carry the risks associated with futures trading, such as market volatility and leverage.
RELATED: Best Mutual Funds in Canada: 15 Top-Performing Mutual Funds
How To Buy Silver ETFs in Canada
Buying stocks and ETFs through an online broker is a great way to gain exposure to the silver market without physically holding the metal. Two popular online brokers in Canada are Wealthsimple Trade and Questrade. These platforms offer a user-friendly interface, low trading fees, and commission-free trading for select ETFs, including some silver ETFs.
- Wealthsimple Trade is known for its straightforward and easy-to-use platform, making it ideal for beginner investors. They offer commission-free trades for ETFs, including the iShares Silver Bullion ETF (SVR.TO) and other silver ETFs.
Wealthsimple Trade is a great trading platform that offers commission-free buying and selling of thousands of stocks. Its user-friendly interface and mobile-optimized investing dashboard make it easy to navigate and accept various payment methods, such as bank transfers and debit cards. In addition to traditional online stock trades, Wealthsimple Trade allows you to engage in other investment activities. It supports both taxable and registered (non-taxable) accounts such as RRSP and TFSA, and there is no minimum balance requirement when opening an account, making it accessible for investors with little money.
- Questrade is another popular choice for investors interested in silver ETFs. They offer a wide range of ETFs, including silver ETFs such as the Horizons Silver ETF (HUZ.TO) and the Global X Silver Miners ETF (SIL.TO). Questrade also has low trading fees and offers commission-free trading for ETF purchases.
Questrade is an online discount brokerage established in 1999 with a $25 billion asset under management. Its popularity in Canada lies in its low commission, low trading fees, and multiple ranges of accounts. As a result, both beginners, intermediate and seasoned investors in Canada find Questrade attractive for DIY and active management investing.
Key Features
- Free tax-loss harvesting
- Low management fees
- Several investment options
- Automatic portfolio rebalancing
- Active management
- Ease of use
RELATED: Questrade vs Wealthsimple: Canada’s Best Investing App
Final Thoughts on the Best Silver ETFs in Canada
Investing in silver ETFs is a smart way to add diversity to your portfolio and potentially profit from the precious metal’s price movements.
Canada offers a range of options for silver ETFs, each with its unique investment strategy and risk profile. You can choose the best fit for your investment goals and preferences, from physical silver ETFs to equity and futures ETFs.
Ensure you research, pick the right ETFs, and consult a financial advisor before making investment decisions. With the right strategy and platform, you can easily invest in the best silver ETFs in Canada and grow your wealth over time.
Don’t wait any longer. Start investing today!
FAQs on Canadian Silver ETFs
Is there a Silver ETF on the TSX?
Yes. The Horizons Silver ETF is traded on the Toronto Stock Exchange (TSE) with the ticker TSX:HUZ.
Is Silver ETF Safe?
It depends on the type of silver ETF you invest, how much and when you invest. Thus, you must invest only in the best ETFs that suit your investment objective and risk tolerance. However, silver is seen as a safe haven because the market has proven stable over the years.
