Silver ETF Beginner's Guide: Complete Strategy for Taiwanese Investors to Master How to Buy ETFs and Enter the Market

Silver Prices Hit Record Highs: How Investors Can Seize the Opportunity

Since 2025, the silver market has been on a steady rise, with silver prices breaking the $60 per ounce mark on December 9th, subsequently reaching a record of $64.6/oz. Year-to-date, silver has surged over 100%, outperforming gold (up 60%) and the Nasdaq (up about 20%).

Expectations of Federal Reserve rate cuts, global supply tightness, and the U.S. government listing silver as a critical mineral are driving this rally. International investment bank UBS has revised its outlook, setting the 2026 silver price target range at $58 to $60 per ounce, with the possibility of breaking through $65/oz.

Amid this investment frenzy, many retail investors in Taiwan are seeking ways to participate. Silver ETFs have become the most popular choice due to their ease of trading, liquidity, and low barriers to entry.

First-Time Buying Silver ETFs: Essential Concepts You Need to Know

What is a Silver ETF?

A silver ETF is an investment fund that tracks the spot price of silver. Its key feature is that investors do not need to hold physical silver; they can participate in silver price movements through a brokerage account. It is listed on exchanges, bought and sold like stocks, and supports anytime entry or exit.

Compared to traditional physical silver investments, ETFs offer clear advantages: no worries about storage, safekeeping, or insurance, much higher liquidity, and lower transaction costs. For Taiwanese investors with limited capital or first-time silver investors, ETFs are the most convenient option.

How Do Silver ETFs Track Silver Prices?

There are two main methods for how silver ETFs operate:

Direct Holding of Physical Silver: The fund holds physical silver bars, and its net asset value (NAV) fluctuates with silver prices. For example, if silver rises by 5%, the ETF’s value also increases by about 5%; if silver falls, the ETF declines accordingly.

Using Futures Contracts for Tracking: The fund replicates silver price movements via COMEX silver futures or other derivatives. This method may have lower costs but can experience tracking errors over the long term due to roll costs.

Silver ETF vs Physical Silver: Which Should Investors Choose?

Physical silver may seem more “tangible,” but practical issues include:

• High Storage Costs: Renting safe deposit boxes or professional vaults costs 1-5% annually; storing at home risks oxidation, theft, or damage.
• Trading Inconvenience: Need to find silver shops or bullion dealers, face bid-ask spreads of 5-6%, verify purity and authenticity, and difficulty liquidating quickly in emergencies.
• Low Liquidity: Prices vary locally, buyback quotes differ significantly, making frequent trading difficult.

In contrast, Silver ETFs are as simple as buying stocks: open an account, place an order, and trade instantly—eliminating physical burdens and offering far greater liquidity. The only downside is that you do not hold actual silver, but for most investors, this is not a major issue.

Mainstream Silver ETF Products in Taiwan

Detailed ETF Analyses

SLV: The Top Choice for Global Silver Investment

Launched in 2006, SLV is managed by BlackRock with assets exceeding $30 billion, recognized as a benchmark product. The fund holds physical silver stored by JPMorgan Chase, employing a passive management strategy, only selling small amounts of silver to cover operational costs, ensuring accurate tracking.

Since 2014, SLV has shifted to tracking the LBMA silver benchmark price, aligning more closely with international spot markets. For investors seeking a stable, low-risk silver exposure, SLV is ideal for long-term allocation.

AGQ: Leverage Tool for Short-Term Trading

Issued by ProShares in 2008, AGQ aims to deliver 2x daily performance of silver prices. Using futures and derivatives, AGQ amplifies short-term gains, attracting traders sensitive to volatility.

Note: Leverage causes compounding decay; daily rebalancing means long-term holding can lead to “time decay.” AGQ is only suitable for short-term trading, not long-term holding.

ZSL: Shorting Silver for Hedging

ZSL offers -2x inverse exposure to silver prices, designed for traders betting against silver or hedging downside risk. When silver drops by 1%, ZSL rises by 2%. Like AGQ, its leverage makes it suitable only for short-term use; long-term holding can suffer from decay due to compounding.

PSLV: For Long-Term Investors Requiring High Purity

Launched in 2010, PSLV is a closed-end fund, unlike open-ended ETFs. It issues a fixed number of units, with market prices subject to premiums or discounts.

Its unique advantage is that investors can redeem physical silver, appealing to long-term investors who want eventual physical ownership. With about $12 billion in assets, PSLV is one of the largest silver-focused closed-end funds globally.

SLVP: Mining Company Portfolio for Excess Returns

Introduced by BlackRock in 2012, SLVP invests in global publicly listed silver exploration and mining companies. Unlike direct silver price tracking ETFs, SLVP offers leverage exposure: when silver prices rise, mining stocks tend to grow even more.

In 2025, SLVP gained 142%, significantly outperforming silver’s 103% increase. However, leverage is a double-edged sword: when silver falls, losses are magnified. Frequent rebalancing and high volatility mean buying and selling spreads are large, and tracking errors are evident, making it suitable for advanced investors comfortable with high risk.

TYO Silver Futures###00738U###: Taiwan’s Local Product

Established in 2018, this is Taiwan’s sole listed silver ETF, tracking the Dow Jones Silver Excess Return Index. It invests in COMEX silver futures to replicate performance, with a risk level rated as “high volatility.”

As a Taiwan-listed product, it offers low trading tax (0.1%), no currency risk, and is convenient for local investors.

How Can Taiwanese Investors Buy Silver ETFs? Three Main Methods

Method 1: Discretionary Trust (Best for Beginners)

Discretionary trust is the main channel for Taiwanese investors to buy overseas ETFs, via domestic brokers (Fubon, Cathay, Yuanta, Yuanta, etc.) executing trades with overseas brokers.

Steps:

1. Open a discretionary trust account with a domestic broker (online or in person, with ID and bank info)
2. Choose TWD or foreign currency settlement
3. Search for ETF code via broker app or website (e.g., SLV)
4. Many brokers support regular fixed investments, auto-investment

Advantages: Regulated, user-friendly Chinese interface, tax handled by broker, funds stay in Taiwan, zero risk

Disadvantages: Higher fees, limited tradable products, slightly slower execution

Method 2: Opening an Account with Overseas Brokers (Lowest Cost)

Open an account directly with an overseas broker platform, reducing middlemen, lowering costs, and offering more choices.

Steps:

1. Apply online for an overseas broker account (prepare passport, ID, proof of address, bank info)
2. Transfer TWD to the broker’s designated account (set up a designated account)
3. Once USD funds arrive, place orders via app or website

Advantages: Low or no commission, access to global ETFs, leverage and margin support, fast trading

Disadvantages: English interface, need to handle taxes and remittance yourself, US withholding tax of 30% on dividends, cross-border fund transfer issues

Method 3: Taiwan-listed Silver ETF

Buy Taiwan-listed TYO Silver Futures (00738U) directly through domestic brokers—most straightforward.

Advantages: No currency risk, low trading tax (0.1%), simple process, TWD settlement

Disadvantages: Limited product options, lower liquidity than overseas ETFs, management fee slightly higher than foreign counterparts

Do You Need to Pay Taxes When Buying Silver ETFs?

Tax obligations depend on the ETF’s listing location:

Taiwan-listed ETFs (e.g., 00738U):

• Buying: Tax-exempt
• Selling: 0.1% transaction tax (e.g., NT$1,000,000 sale pays NT$1,000)
• Dividends: Usually not paid, so no additional tax

Overseas-listed ETFs (e.g., SLV, AGQ):

• Gains from buying and selling are considered overseas property transactions, included in overseas income
• Annual overseas income ≤ NT$1 million: not counted toward minimum tax
• Over NT$1 million: fully included in taxable income, after NT$7.5 million exemption, taxed at 20%

If ETFs pay dividends, U.S. withholding tax of 30% applies, which investors must claim back via tax refund procedures.

Which Investment Method Yields the Highest Returns?

From the above, silver futures offer the highest potential returns but with the greatest risk; mining stocks provide substantial gains but are highly volatile; silver ETFs offer steady, manageable returns suitable for beginners and conservative investors.

Risks and Precautions When Investing in Silver ETFs

Despite their convenience, investors should be aware of these risks:

1. Silver Price Volatility Far Exceeds Stocks Silver’s annual volatility often exceeds 50%, much higher than gold or equities. The 2025 surge over 100% is exciting, but historical data shows sharp corrections can occur. Assess your risk tolerance carefully.

2. Tracking Errors and Cost Decay Futures-based ETFs incur roll costs, which can reduce long-term returns; physical silver ETFs have annual fees of 0.4-0.5%, gradually eating into profits.

3. Currency and Tax Risks Investing in overseas ETFs involves USD/TWD exchange risk; exceeding NT$1 million in overseas income triggers tax obligations, requiring self-management.

4. Leverage Decay in Leveraged ETFs Products like AGQ and ZSL adjust daily leverage, leading to decay over time; suitable only for short-term trading.

Conclusion

Silver ETFs, with their low barriers, high liquidity, and trading convenience, are the most practical tools for Taiwanese investors to participate in silver markets. Whether through discretionary trust, overseas brokers, or Taiwan-listed products, investors can easily gain exposure without the burdens of physical storage and security.

However, remember that silver is a high-volatility commodity influenced by industrial demand, geopolitical factors, and monetary policies. Diversify your portfolio, avoid over-concentration, and review your positions regularly to balance potential gains with risk management.