There’s little more to add to the silver story beyond what we’ve covered for gold, but silver also has significant industrial applications. Roughly half of global silver production is held as a store of value, similar to gold, while the other half is used in essential industries such as electronics, solar panels, electric vehicles, and medical applications, thanks to its exceptional conductivity, reflectivity, and antibacterial properties. The pullback in silver has been almost identical to that in gold; hence, which one to use comes down to investors’ personal preference. However, we note the SIL ETF is US-traded, which comes with advantages and disadvantages with the timing of the next major swing (s) by precious metals, arguably the current determining factor.
- At this stage, from a risk/reward perspective, we can see the SIL testing lower in the coming weeks before finding support.
SIL tracks the Solactive Global Silver Miners index, currently having 57% exposure in Canada, 21% US, 11% Mexico, and 5% Peru. It currently holds 46 stocks, with heavyweight Wheaton Precious Metals its largest position at 16.7% of the ETF. We believe this is an excellent ETF with its 0.65% pa cost, reasonable considering the global exposure to stocks which aren’t readily available on the ASX.
- We believe the SIL ETF represents great buying in the 60-65 area, but again, this may increase in the coming weeks if the sector continues to stabilise.
