## Silver Prices Hit New High! How Should Taiwanese Retail Investors Enter Silver Investment via ETFs?

**Silver's Bullish Momentum Is Impressive; Investors Should Know Before Entering the Market**

The recent rally in silver has indeed been remarkable. Driven by multiple factors such as the Federal Reserve's rate cut expectations, tightening global supply, and its official inclusion in the US critical mineral list, spot silver prices in London reached a historic high of $83.645 per ounce in December 2025. Since the beginning of the year, the increase has exceeded 140%, far surpassing gold by over 80% and leading the Nasdaq Composite Index by about 120%.

However, market enthusiasm has also attracted regulatory attention. CME raised margin requirements for silver futures twice in late December, with the latest increase raising the initial margin for March 2026 contracts from about $22,000 to $25,000, a total increase of 25%. This intervention caused silver prices to retreat from their peak to the $70-75 range, serving as a reminder that volatility risks should not be underestimated.

## Silver ETFs: The Preferred Tool for Retail Investors to Enter

**What Are Silver ETFs? Why Choose Them?**

Silver ETFs are investment funds that track the price of silver, allowing investors to participate in silver price movements without holding physical metal. They are listed and traded on stock exchanges, with buying and selling as convenient as stocks. Compared to the hassle of storing, transporting, and verifying physical silver, ETFs offer a more efficient way to participate.

How do ETFs work? Most products hold physical silver bars directly or track silver prices through derivatives like futures contracts. When silver rises by 5%, ETF values typically increase by about 5%; likewise for declines. This linear tracking makes them ideal for beginners and small-scale investors.

## Seven Common Silver ETFs Available to Taiwanese Investors

| Product Code | Underlying Asset | Expense Ratio | Core Features |
|----------------|------------------|----------------|---------------|
| SLV | Physical Silver | 0.50% | The most well-known globally, assets over $30 billion, passively managed |
| DBS | Silver Futures | 0.75% | Tracks COMEX silver futures |
| AGQ | Silver Futures | 0.95% | 2x leverage, for short-term trading |
| ZSL | Silver Futures | 0.95% | 2x inverse leverage, a tool for bearish traders |
| PSLV | Physical Silver | 0.62% | Closed-end fund, about $12 billion in assets, supports physical redemption |
| SLVP | Silver Mining Stocks | 0.39% | Invests in global silver mining companies, higher volatility |
| Silver Futures (00738U | Silver Futures | 1.00% | Listed in Taiwan, tracks Dow Jones Silver Excess Return Index |

**In-Depth Analysis of Mainstream Products**

**SLV’s Stability and Scale Advantage:** Launched in 2006 and managed by BlackRock, this flagship product directly holds physical silver reserves stored by JPMorgan Chase. It adopts a passive management approach, not actively trading to capture volatility, only periodically selling small amounts of silver to cover operating costs. With over $30 billion in assets, it offers ample liquidity and security.

**Leverage Features of AGQ and ZSL:** ProShares launched AGQ in 2008, which tracks twice the daily performance of the Bloomberg Silver Index via futures and swap contracts. Conversely, ZSL provides -2x inverse leverage. Both are affected by compounding decay and rollover costs, making them suitable only for short-term traders. Long-term holding is not recommended—especially when assessing investment interest coverage multiples—since leverage amplifies both gains and losses proportionally.

**Advantages of PSLV’s Physical Redemption:** Launched in 2010, this closed-end fund’s trading price is determined by market supply and demand, often trading at a premium or discount. Its unique feature is allowing investors to redeem physical silver, suitable for long-term allocation. With about $12 billion in assets, it is one of the largest silver-themed closed-end funds.

**SLVP and the Leverage Effect of Mining Stocks:** Launched by BlackRock in 2012, it passively tracks the MSCI ACWI Select Silver Miners Index. Its 2025 performance was about 142%, surpassing the 103% increase in pure silver prices, demonstrating the amplification effect of mining stocks on silver price rises. However, its volatility and tracking errors are larger, with frequent annual component adjustments and wider bid-ask spreads.

**Taiwan-listed Silver Futures )00738U:** Established in May 2018, with a listing price of NT$20, it invests in COMEX silver futures to track the underlying. Rated as "high volatility," it does not distribute dividends. As a Taiwan-listed option, it offers the simplest tax treatment.

## Two Main Ways for Taiwanese Investors to Purchase Silver ETFs

**Via Discretionary Trust: Safe and Suitable for Beginners**

Invest through domestic brokers (Fubon, Cathay, Yuanta, Yuanta, etc.) by instructing overseas brokers. Investors only need to open a discretionary trust account with a domestic broker, choose settlement in TWD or foreign currency, and place orders via the app.

Advantages include regulation by the Financial Supervisory Commission, tax handling by the broker, and no need to transfer funds abroad. Disadvantages are higher transaction fees and limited tradable products.

**Open an Overseas Broker Account Directly: Lower Cost**

Open an account online with required documents such as passport, ID card, and proof of address. After transferring funds, you can trade directly. Fees are very low or even zero, with a wide range of products and support for advanced tools.

However, interface in English, self-managed currency exchange and tax (e.g., 30% US dividend withholding), and fund security issues require self-assessment.

## Taxation of Silver ETFs

**Taiwan-listed Silver ETFs:** Treated like Taiwan stocks, exempt from tax when buying, 0.1% tax on selling.

**Overseas-listed Silver ETFs:** Considered as overseas property transaction income, included in overseas income. If total annual income ≤ NT$1 million, exempt from minimum tax; exceeding NT$1 million is fully included in basic income and taxed at 20% after deducting NT$7.5 million exemption.

## Silver ETF vs. Other Investment Methods: Returns and Risks Comparison

Four major silver investment methods each have their pros and cons. Investors should choose based on risk tolerance and capital scale:

**Physical Silver:** Actual ownership with no counterparty risk, but storage costs of 1-5% annually, theft risk, low liquidity, and 5-6% buy-sell premiums. Estimated 2025 returns around 95-100% (after costs).

**Silver Futures:** Leverage small capital to control large positions, suitable for long and short positions. High risk, leverage can wipe out principal, requires monitoring rollover and margin calls. If correctly positioned with 2x leverage, 2025 returns could exceed 200%, but with high volatility.

**Silver Mining Stocks (e.g., SLVP):** About 142% increase in 2025, showing leverage effect. However, affected by company operations, government regulation, rising costs, etc., requiring stock research. Higher volatility and risk of loss than pure silver exposure.

**Silver CFDs:** Convenient trading, flexible leverage, low entry barrier. No physical ownership, risk increases with leverage. Returns and losses are magnified proportionally.

**Silver ETFs:** Easy to trade, high liquidity, no storage costs, suitable for quick entry and exit. Management fees erode long-term returns, no physical asset, and potential tracking errors. Estimated 2025 returns slightly below silver price, around 100-140%.

## Three Major Risks Investors Must Face When Investing in Silver ETFs

**Much Higher Volatility Than Gold and Stocks:** Silver prices are highly volatile. Although up 140% in 2025, historical data shows sharp corrections. After margin increases on December 29, silver prices plunged over 11 intraday, causing significant losses for many investors. Suitable only for those with high risk tolerance.

**Accumulating Tracking Errors:** Futures-based ETFs are affected by rollover costs, potentially underperforming spot silver over the long term; physical ETFs with annual fees of 0.4-0.5% gradually erode returns.

**Foreign Investment Currency and Tax Complexity:** Overseas ETFs face currency fluctuations and complex tax calculations. Silver prices are also influenced by geopolitical factors, industrial demand (solar, electronics), and monetary policies.

## Investment Advice and Conclusion

From an asset allocation perspective, silver ETFs indeed offer a way to participate without the hassle of physical management, combining liquidity and trading convenience. Both discretionary trust and overseas broker options are available to Taiwanese investors.

However, silver prices are highly volatile and susceptible to speculative sentiment. Different ETFs vary significantly in fees, tracking methods, and leverage use. Diversification, avoiding over-concentration, and regular review of the market and positions are recommended. Also, assess your interest coverage multiple and risk tolerance to ensure investment decisions align with your financial situation—this is the key to wise investing.