SAN DIEGO (ETFguide.com) – Another exchange-traded fund that tracks the price of silver has just been launched.
The ETFS Physical Silver Shares (NYSEArca: SIVR) was introduced by ETF Securities on the New York Stock Exchange as an alternative to the iShares Silver Trust (NYSEArca: SLV). Each share of SIVR is designed to reflect the one ounce price of silver bullion.
“ETFS has built a very successful business in Europe providing market access to the world’s commodity markets, and we are extremely excited to be able to offer this new product to US investors. We have put together an excellent team, and we intend to build on our strengths of providing quality customer service and research to help our investors maximize their experience when using ETF Securities’ products,” said President and CEO of ETF Securities USA LLC Graham Tuckwell.
The iShares Silver Trust, which competes head-to-head with SIVR, has amassed almost $4 billion since being launched in 2006. SLV’s annual expense ratio is 0.50%.
The ETFS Silver Trust is backed by physical silver bullion held by HSBC in London. SIVR’s shares represent an interest in physical silver bullion owned by the Trust. The physical silver bullion of the trust is subject to minimal counterparty or credit risks, which is different with investment products that achieve bullion exposure through the use of derivatives.
According to the prospectus, SIVR’s annual expense ratio is fixed at 0.30% until July 24, 2010. Thereafter it will adjust to 0.45%.
Owning precious metals via an cexchange-traded vehicle has become popular with investors. It offers convenience and eliminates the cost of insurance and storage.
In the U.S., the SPDR Gold Shares (NYSEArca: GLD) was the first such product to be introduced back in 2004. Today, GLD has around $33 billion in assets.
ETF Securities Ltd (ETFS) currently has approximately $12 billion in assets invested in over 130 of its products globally. In 2003, the company developed the world's first Gold ETP in Australia and London. ETFS also launched the world's first Crude Oil ETP in 2005 and then developed a comprehensive product range of Commodity ETPs which were listed on the London Stock Exchange in 2006. These products are not available to US Investors.
