ETPs changed landscape for Silver investing: Silver Institute

UNITED STATES April 28 2016 9:03 AM

NEW YORK (Scrap Register): The iShares Silver Trust (NYSE Arca: SLV), the first silver exchange-traded product that turns 10 years old on Thursday, has broadened the base of investors in the metal, said the Silver Institute. 

This is now the world’s largest silver-backed investment product with 330 million ounces and net assets of more than $5.5 billion, the Silver Institute added.

The ETP trades like a stock but tracks the price of the commodity, with metal put into storage to back the shares. The silver ETP was launched on April 28, 2006, a couple of years after the first one in gold. The products give investors exposure to precious metals without having to take physical delivery, thereby avoiding storage, assaying and other charges. 

The Silver Institute noted that the majority of gold ETP holdings are from institutional investors, whereas silver ETPs have a higher proportion of retail investors. This might be why silver ETPs have tended to be more resilient than those of gold, the Silver Institute said.

“The silver-backed ETPs have changed the investment landscape for silver investing by broadening the base of investors on a global basis,” said Michael DiRienzo, executive director of the Silver Institute. 

He added that investment in silver products was less than 100 million ounces in 2006. By contrast, after the end of the first quarter of 2016, silver held by global ETPs stood at 640 million ounces.