Silver prices hit a record high. Which ETF should Taiwanese investors choose to invest?

Silver Price Breaks New Record, Investment Enthusiasm Reignites

The international silver market in 2025 has entered a historic moment. Driven by expectations of Federal Reserve rate cuts, ongoing tightness in global supply chains, and the U.S. officially including silver in the critical minerals list, the London spot silver price broke through the psychological level of $70 per ounce on December 23, reaching a historical high of $83.645/oz.

By the end of the year, the annual increase in silver prices had exceeded 140%, making it the best-performing asset of 2025. In comparison, gold rose less than 60%, and the Nasdaq Composite Index increased only about 20%, highlighting silver’s strong performance.

However, this rally has also attracted market attention. CME Group, in order to control risks, raised the margin requirements for silver futures twice within a month. The most recent adjustment occurred on December 26, taking effect from December 29, when the initial margin for March 2026 silver futures contracts increased from $22,000 to $25,000, a 25% rise. This adjustment temporarily suppressed the rally, with silver prices retreating to the $70-75 range.

Silver ETFs Become the Primary Tool for Retail Investors

Faced with this silver price surge, many Taiwanese investors are seeking ways to participate. Silver ETFs have gradually become the mainstream choice for retail investors due to their convenience and low entry barriers.

What is a silver ETF? How does it work?

A silver ETF is essentially an investment fund that tracks the price movements of silver. Investors can participate in silver price fluctuations without owning physical silver. ETFs are listed on stock exchanges and traded like stocks, allowing investors to buy and sell at any time during trading hours.

These funds typically track silver prices through two methods: directly holding physical silver bars or using derivatives such as futures contracts linked to silver prices. When silver prices rise by 5%, the value of the corresponding silver ETF also increases by about 5%; similarly, when prices fall, the ETF value declines accordingly.

Compared to investing in physical silver, silver ETFs offer advantages such as avoiding storage, insurance, and verification costs and risks; simplified trading processes; much higher liquidity than physical assets; and easy access through securities accounts.

Why is a silver ETF more practical than physical silver?

While physical silver provides a tangible asset and a sense of security, practical operation involves many issues. First, storage costs—whether stored in bank safes or professional vaults—must be paid annually; storing at home raises concerns about oxidation, theft, or damage.

Trading is also cumbersome. Investors need to find trustworthy silver shops or precious metals dealers, endure significant bid-ask spreads, and sometimes pay additional costs for purity testing. The biggest issue is low liquidity—when urgent cash is needed, it’s difficult to quickly liquidate, and purchase prices at different silver shops lack transparency.

Silver ETFs resolve these problems. Investors can trade easily through securities accounts, just like stocks, with flexible entry and exit. The funds are managed and held by professional institutions, either physically or via futures, allowing investors to closely follow silver price movements without physical burdens.

Mainstream Silver ETF Products in the Market

Currently, investors have many options for silver ETFs. The table below summarizes seven popular funds:

SLV - The Most Recognized Choice Globally

SLV was launched in 2006 and operated by asset management giant BlackRock. Its core assets are physical silver, custodied by JPMorgan Chase. It employs a passive management strategy, periodically selling small amounts of silver to cover operational costs.

Since 2014, SLV has tracked the LBMA silver benchmark price, ensuring high synchronization with actual market prices. Its physical holding basis makes it an ideal tool for direct exposure to silver prices.

AGQ and ZSL - Leveraged and Inverse Products

AGQ was launched by ProShares in 2008, providing 2x leverage through futures contracts. Buying AGQ offers double the return of silver price movements, but also doubles the risk. It mainly targets short-term high-return investors and is not recommended for long-term holding.

ZSL is the inverse version of AGQ, offering -2x returns. Suitable for investors expecting silver prices to fall, for hedging or shorting. Due to compounding decay issues, both are not suitable for holding over a month.

PSLV - A Unique Structure of Closed-End Funds

PSLV, launched in 2010, is a closed-end fund with a fixed issuance size. Its market price is determined by supply and demand, often trading at a premium or discount to net asset value (NAV).

It allows investors to redeem physical silver from the fund, making it suitable for long-term asset allocation. With assets around $12 billion, it is one of the largest silver-themed closed-end funds.

SLVP - Mining Company Stocks

SLVP was launched by BlackRock in 2012, investing in publicly listed companies involved in silver exploration or mining. It tracks the MSCI ACWI Select Silver Miners Investable Market Index, with strict limits on individual stock weights—no single stock exceeds 25%, and stocks over 5% combined account for less than 50%.

Its management fee is 0.39%, below industry median, but it exhibits higher volatility and tracking errors, with frequent component adjustments and wider bid-ask spreads. From a long-term return perspective, its attractiveness is limited.

Quota Yuan Avenue Dow Jones Silver - Local Option

This is a Taiwan-listed silver ETF, established in May 2018 and officially listed in June, with an initial price of NT$20. It tracks the Dow Jones Silver Excess Return Index via COMEX silver futures, does not distribute dividends, and has a high volatility risk level.

Purchase Channels for Taiwanese Investors

Channel 1: Custodian-Agency Trading

This is the main method for Taiwanese investors to buy overseas silver ETFs. Investors place orders through domestic brokers (such as Fubon, Cathay, Yuanta, Yuanta, etc.), who delegate execution to overseas brokers.

Steps:

• Open a custodian account with a domestic broker (online or in person), prepare ID, passport, bank account, etc.
• Choose settlement in TWD or foreign currency
• Use broker’s app or website to search for codes like SLV and place orders; some brokers support regular investment plans

Advantages: Regulated by the Financial Supervisory Commission, ensuring safety; tax handling assisted by brokers; no need to transfer funds abroad; user-friendly Chinese interface

Disadvantages: Higher transaction fees; limited trading products

Channel 2: Directly Opening an Overseas Broker Account

A more direct investment method—investors open an account online with an overseas broker platform and trade directly, saving intermediary costs.

Steps:

• Open an account online on the overseas broker platform, prepare passport, ID, proof of address, bank info
• Transfer New Taiwan Dollars into the account (convert to USD via wire transfer, with a designated account)
• Use the platform’s app or website to search for silver ETF codes and place orders

Advantages: Very low or zero commissions; wide range of trading products; supports advanced trading tools

Disadvantages: Some platforms are only in English; need to handle US dividend withholding tax (30%) and tax refund filings; transferring funds abroad involves security and estate planning considerations

Tax Considerations for Silver ETF Investments

Tax liabilities vary depending on the purchase location.

Buying Taiwan-listed Silver ETFs

Taiwan-listed silver ETFs (such as Quota Yuan Avenue Dow Jones Silver) are treated like Taiwan stocks, with the simplest tax treatment: tax-free on purchase, 0.1% tax on sale.

Buying Overseas Silver ETFs

Taiwanese investors purchasing US silver ETFs (like SLV) are considered to be engaging in overseas property transaction income, included in overseas income.

Important threshold: If total overseas income for the year is ≤ NT$1 million, it is exempt from the minimum tax; exceeding NT$1 million means the full amount is included in basic income. The portion exceeding the NT$7.5 million exemption is taxed at 20%.

Comprehensive Comparison of Silver Investment Methods

Investors can choose suitable channels based on risk tolerance and investment horizon:

Risks to Watch for in Silver ETF Investment

Price Volatility

Silver prices fluctuate far more than gold and stocks. Although up over 140% in 2025, history shows sharp corrections are common. After the margin increase on December 29, silver prices once plunged over 11% intraday, causing significant losses for many investors. Since silver ETFs track silver prices directly, their volatility is similar, making them suitable for high-risk-tolerance investors.

Tracking Error Issues

Futures-based ETFs may underperform physical silver over the long term due to costs associated with rolling futures contracts. Physical ETFs have higher tracking accuracy but incur annual fees of 0.4-0.5%, gradually eroding returns.

Exchange Rate and Tax Risks

Overseas ETF investments face risks from USD/TWD exchange rate fluctuations. Additionally, silver prices are influenced by geopolitical events, industrial demand (solar, electronics), and global monetary policies. Investors should monitor macroeconomic factors closely.

Conclusion

Silver ETFs serve as convenient tools to participate in silver market trends, offering easy trading, high liquidity, and low costs—especially suitable for investors who want exposure to precious metals without the burdens of physical management.

However, silver prices are more volatile than stocks, affected by industrial demand and market sentiment. Different silver ETF products vary significantly in fees, tracking methods, and leverage use. It is recommended that investors diversify their holdings, avoid over-concentration in a single product, and regularly review market changes and personal positions to balance participation in silver price rallies with risk management.