Silver prices hit a new high again! How can Taiwanese investors get involved through silver ETFs? Detailed explanation of commission rates for each product

Silver Price and Silver ETF Performance in 2025

London spot silver, driven by multiple positive factors, has experienced a historic rally. Expectations of Federal Reserve rate cuts, ongoing global supply tensions, and recent inclusion of silver in the U.S. critical minerals list have all contributed to this momentum. Silver prices successfully broke the key psychological level of $70 per ounce at the end of last year and surged to a record high of $83.645/ounce.

For the year, silver has gained over 140%, making it one of the best-performing assets. In comparison, this increase not only outpaces gold by more than 80% but also far exceeds the approximately 120% rise of the Nasdaq Composite Index.

It is worth noting that to curb excessive silver price surges, CME has recently raised futures margin requirements twice. The latest announcement was made on December 26, stating that from the close on December 29, the margin levels for metal futures would be adjusted again. For example, the initial margin for the March 2026 contract was increased from about $22,000 to $25,000, a total rise of 25%.

This regulatory adjustment caused silver prices to retreat from the high point to the $70-75 range. Nevertheless, market expectations for silver prices in 2026 remain optimistic.

Silver ETFs as the Main Channel for Retail Investors to Participate in Silver Investment

In response to rising silver prices and investment opportunities, Silver ETFs have become increasingly popular among retail investors due to their convenience and low entry barriers.

ETF Core Mechanism

Silver ETFs are investment funds that track the performance of silver prices. They allow investors to participate in the silver market without physically holding silver. These funds operate by directly holding physical silver bars or through futures contracts and derivatives to track silver prices.

The value of ETFs fluctuates in tandem with the spot silver price. For example, if silver rises by 5%, the ETF’s net asset value (NAV) will also increase by about 5%. Conversely, if silver falls, the ETF’s NAV declines accordingly. Since ETFs are traded on stock exchanges like stocks, investors can buy and sell anytime during trading hours, offering superior liquidity and convenience compared to physical silver.

Physical Silver vs. ETF Comparison

Physical silver provides a tangible sense of security—“seeing and touching”—but practical handling is complicated. Storage involves additional costs for safe deposit boxes or vaults, and keeping silver at home risks oxidation, theft, or damage.

Trading physical silver is also more complex, requiring finding reputable dealers or precious metals traders, facing larger bid-ask spreads, and verifying purity and authenticity before purchase. Due to low liquidity, quick liquidation during urgent needs is difficult, and buyback prices at local shops lack transparency.

In contrast, silver ETFs can be bought and sold through brokerage accounts, similar to stocks. Investors can enter and exit the market flexibly, avoiding transportation and storage concerns while still closely tracking silver prices. This makes silver ETFs a more efficient and economical way for Taiwanese investors to participate in the silver market.

Mainstream Silver ETF Products and Fee Structures

Popular silver ETF products among Taiwanese investors include:

SLV (iShares Silver Trust)

SLV is the world’s largest silver ETF by market share, launched by Blackrock in 2006, managing over $30 billion. It tracks the LBMA silver benchmark price, holding mainly physical silver, with JPMorgan Chase acting as custodian.

The fund is passively managed, not actively trading silver to capture price differences, but periodically sells small amounts of silver to cover operational costs. The annual expense ratio is 0.50%, one of the lowest among similar products.

AGQ (ProShares Ultra Silver)

Launched in 2008, AGQ offers 2x leverage exposure to silver prices via futures and derivatives. The annual fee is 0.95%. It targets short-term traders seeking amplified gains but involves higher risk.

Note that due to compounding effects and leverage decay, AGQ is suitable only for short-term trading, not long-term holding.

ZSL (ProShares UltraShort Silver)

ZSL provides 2x inverse (short) exposure to silver, with an annual fee of 0.95%. It is designed for hedging against silver declines or speculative trading, also suitable only for short-term strategies due to leverage and inverse features.

PSLV (Sprott Physical Silver Trust)

Launched in 2010, PSLV is a closed-end fund with about $12 billion in assets, one of the largest physical silver funds. Unlike open-end ETFs, it issues a fixed number of units, and the trading price can trade at a premium or discount to NAV.

The annual fee is 0.62%. A unique feature is that investors can redeem physical silver, making it suitable for long-term investors. However, trading prices may deviate from actual NAV.

SLVP (iShares MSCI Global Silver and Metals Miners)

Launched by Blackrock in 2012, SLVP manages around $600 million with an expense ratio of 0.39%, lower than the industry average. It invests in global listed companies involved in silver exploration and mining, rebalancing quarterly to maintain structure.

Historically, SLVP exhibits higher volatility, tracking errors, frequent component adjustments, wider bid-ask spreads, and limited net returns.

Taiwan’s Dow Jones Silver ETF (00738U)

A local Taiwanese silver ETF established in 2018, tracking the Dow Jones Silver Excess Return Index and investing in COMEX futures. The annual fee is 1%, and it is a high-volatility product with no income distribution.

Ways for Taiwanese Investors to Purchase Silver ETFs

Discretionary Account Method

The most common method is through domestic brokerages (e.g., Fubon, Cathay, Yuanta, Mega). The process includes:

• Opening a discretionary account (online or in person)
• Preparing necessary identification documents
• Choosing TWD or foreign currency settlement
• Placing orders via brokerage platforms

Advantages include regulation by the Financial Supervisory Commission, higher security, no need to handle foreign currency exchange, and brokerage assistance with taxes and fees. Disadvantages are higher commissions and limited trading products.

Opening Overseas Brokerage Accounts Directly

Investors willing to handle English interfaces and remittance themselves can open accounts directly with overseas brokers, avoiding middlemen fees. The process involves online account opening, providing passports and ID, remitting USD, and placing orders.

This method offers very low commissions (many are fee-free or fixed), a wide range of tradable assets, and advanced trading tools. The drawbacks include no Taiwanese legal protections, some dividends requiring self-reporting US taxes (30% withholding), and more complex cross-border fund transfers.

Tax Considerations and Fee Structures

Taiwan-listed silver ETFs are tax-efficient: buying is tax-exempt, and selling incurs a 0.1% transaction tax based on the transaction amount.

Overseas silver ETFs are classified as overseas property income, included in foreign income. If total overseas income for the year does not exceed NT$1 million, it is exempt from the minimum tax; exceeding that amount, the full sum is included in taxable income. After deducting NT$7.5 million exemption, the excess is taxed at 20%.

Investors should also pay attention to differences in commissions and fee rates among products. Domestic discretionary accounts typically charge 0.125%-0.2% of transaction value; overseas brokers often have no commissions or fixed fees. Annual management fees vary from 0.39% (SLVP) to 1% (Taiwan Dow Jones Silver ETF).

Risks and Return Comparison of Silver Investment Methods

Investment Risks and Precautions

Price volatility risk is the primary concern in silver investment. Silver prices fluctuate far more than gold or stocks. Although 2025 saw over 140% gains, historical data shows sharp corrections are common. After the margin increase on December 29, silver experienced intraday drops over 11%, causing significant losses for many investors. Suitable for high-risk tolerance investors.

Tracking errors are also notable. Futures ETFs may underperform spot silver over the long term due to roll costs; physical silver ETFs, while more accurate, still incur annual fees of about 0.4-0.5%, which erode returns.

Overseas ETFs involve currency risk, tax issues, and are influenced by geopolitical factors, industrial demand (solar, electronics), and monetary policies.

Investors should diversify holdings, regularly review market changes and positions, and choose products and fee structures aligned with their risk appetite and investment horizon.

Summary

Silver ETFs provide a securitized way to participate in precious metals investing, eliminating the need for physical storage while offering liquidity and trading convenience. For investors interested in silver exposure but unwilling to bear the costs of physical management, ETFs are a practical choice.

However, silver prices are volatile and affected by industrial demand and market sentiment. Different silver ETFs vary in management fees, tracking methods, leverage, and trading channels (discretionary vs. overseas brokers). Investors should select products and trading methods based on their risk preferences, investment duration, and capital.