Silver has experienced an unprecedented rise this year thanks to the COVID-19 pandemic. It has gained 42.2% over the past year as rising market volatility and a weakening U.S. dollar have incentivized investors to hedge their investments by taking positions in silver among other safe-haven assets.

A recently discovered new strain of coronavirus has increased financial market volatility, and many analysts predict another market correction in the near term. The CBOE volatility index, which gauges market sentiment through futures and options pricing, has gained 4.5% over the past month.

The United States’ dovish monetary stance combined with rising national debt have accelerated the depreciation of the U.S. dollar. The country’s national debt has increased nearly 200% since 2008 to $27 trillion. This, combined with a recent $900 billion coronavirus relief package signed by the Congress (but yet to be signed by the President), has placed enormous pressure on the currency, motivating many investors to exit the greenback in favor of assets that will hedge their investments against such risks.

The ongoing global clean-energy drive bodes well for silver. The metal is a good conductor of heat and electricity and it possesses light sensitivity. It has huge applications in the solar-panel and battery industries. President-elect Joe Biden’s $2 trillion Green New Deal proposal will likely bolster the demand for silver significantly.

As such, ETFs such as iShares Silver Trust (SLV), Aberdeen Standard Physical Silver Shares ETF (SIVR) and ETFMG Prime Junior Silver ETF (SILJ), which all have direct exposure to the precious metal, should grow significantly we believe in light of recent public health and governmental fiscal developments, and rising industrial demand.

iShares Silver Trust (SLV)

SLV is a commodity ETF that invests in silver bullion. With $14.27 billion in assets under management (AUM). SLV closely tracks the London Silver Fix price to determine its underlying asset value. The ETF was created primarily to allow investors to hedge their broader portfolios against inflation risk; it also acts as a hedge against volatility.

SLV has an expense ratio of 0.5%, which is slightly higher than the category average of 0.45%. However, the ETF’s robust returns over the past year compensates for the higher expenses. The fund has gained 46.1% over the past year, 101.6% over the past nine months, and 2.8% over the past three months. SLV is an attractive long-term bet as well we think; it has returned 52.1% over the past three years.

SLV has gained more than 150%, hitting its 52-week high of $27.39 in August since hitting its 52-week low off $10.86 in March. SLV has gained 42.7% year-to-date, outperforming the S&P 500’s 14.1% returns over this period.

How does SLV stack up for the POWR Ratings?

A for Trade Grade

B for Buy & Hold Grade

B for Peer Grade

The stock is currently ranked #8 of 36 ETFs in the Precious Metals ETFs group.

Aberdeen Standard Physical Silver Shares ETF (SIVR)

SVR also invests in silver bullion, which it stores them in a secure vault at JPMorgan Chase bank. It tracks the silver price set by the London Bullion Market Association to determine its NAV. It has approximately $586.86 million in assets under management.

SVR has a relatively low expense ratio of 0.3%, compared to category average of 0.45%. It has gained 46.5% over the past year, 93.2% over the past nine months, and 12.6% over the past three months. Regarding its price performance over the last three years, SVR returned 55.4%.

Moreover, SLV has gained more than 150% to hit its 52-week high of $28.44 in August, since hitting its 52-week low of $11.30 in March.

It is no surprise then that SIVR is rated “Buy” in our POWR Ratings system, with an “A” for Trade Grade, and a “B” for Buy & Hold Grade and Peer Grade. It is currently ranked #14 in the same group.

ETFMG Prime Junior Silver ETF (SILJ)

SILJ invests in small and micro-cap silver mining and exploration companies operating across the world. It closely tracks the ISE Junior Silver (Small Cap Miners/ Explorers) Index. SILJ has a MSCI Fund Rating of B, considering the environmental, social and governance factors. This actively managed fund is ideal for investors aiming to gain substantial profits from silver investments rather than just hedging their portfolio. It has assets under management worth approximately $518.25 million.

SILJ has an expense ratio of 0.69%, which is relatively higher than the category average of 0.47%. It has gained 31.9% over the past year, 135.1% over the past nine months and 18.1% over the past three months. SILJ has returned 36.9% over the past three years.

SILJ has gained more than 255% to hit its 52-week high of $17.21 in August since hitting its 52-week low of $4.84 in March.

SILJ’s POWR Ratings reflect this promising outlook. It has a “Buy” rating with an “A” for Trade Grade, and a “B” for Buy & Hold Grade and Peer Grade. It is currently ranked #16 of 36 ETFs in the same group.

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SLV shares were trading at $23.78 per share on Thursday morning, down $0.02 (-0.08%). Year-to-date, SLV has gained 42.57%, versus a 16.61% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More...

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