Silver exchange-traded products are exchange-traded fund

Exchange-traded fund

An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE...

s (ETFs), exchange-traded notes (ETNs) and closed-end fund

Closed-end fund

A closed-end fund is a collective investment scheme with a limited number of shares. It is called a closed-end fund because new shares are rarely issued once the fund has launched, and because shares are not normally redeemable for cash or securities until the fund liquidates.Typically an...

s (CEFs) that aim to track the price of silver

Silver as an investment

Silver, like other precious metals, may be used as an investment. For more than four thousand years, silver has been regarded as a form of money and store of value. However, since the end of the silver standard, silver has lost its role as legal tender in many developed countries such as the...

. Silver exchange-traded product

Exchange-traded product

An exchange-traded product is a derivatively-priced security which trades intra-day on a national stock exchange. ETPs are typically benchmarked to indices, stocks, commodities, or may be actively managed...

s are traded on the major stock exchange

Stock exchange

A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...

s including the London

London Stock Exchange

The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...

 and New York Stock Exchange

New York Stock Exchange

The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...

s. The U.S Geological Survey cites the emergence of silver ETFs as a significant factor in the 2007-2011 price rise of silver. As of September 2011, the largest of these funds holds the equivalent of over one third of the world's total annual silver production.

Physically backed funds

• Central Fund of Canada and Silver Bullion Trust are closed-end funds created by the same Canadian founders and mandated to keep the bulk of their net assets in precious metals, with a small percentage of cash. The Central Fund of Canada holds a mix of gold and silver, while the Silver Bullion Trust holds only silver. The Central Fund of Canada and Silver Bullion Trust initial public offering
  Initial public offering
  An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
  
  s were completed in 1961 and 2009 respectively.
• iShares Silver Trust was launched by iShares
  IShares
  iShares are a family of exchange-traded funds managed by BlackRock. The first iShares were known as WEBS but were since rebranded.Each iShares fund tracks a bond or stock market index...
  
   in April 2006. As of November 2010, iShares Silver Trust is the largest silver ETF on the market with over 340 million troy ounces of silver in storage.
• ETFS Physical Silver was launched by ETF Securities
  ETF Securities
  ETF Securities is a global company based in London, UK, specialising in managing exchange-traded funds , Exchange Traded Commodities and Exchange Traded Currencies - History :...
  
   in April 2007 and is backed by allocated silver bullion. ETF Securities have since launched physical silver ETFs on multiple exchanges around the world including Paris , Australia , New York and Tokyo . ETFS Physical Silver is backed by allocated bullion in the form of LBMA bars held with a custodian, HSBC Bank USA
  HSBC Bank USA
  HSBC Bank USA, National Association, the American subsidiary of UK-based HSBC Holdings plc, is a bank with its operational head office in New York City and its nominal head office in McLean, Virginia . HSBC Bank USA, N.A...
  
  , and audited twice a year by an independent third party, Inspectorate International Ltd.
• ZKB Silver ETF was launched by Zürcher Kantonalbank in May 2007 and invests exclusively in physical silver.
• Claymore Silver Bullion Trust is a closed-end fund created by Claymore Investments. The initial public offering was completed on July 15, 2009.
• Julius Baer Physical Silver Fund was launched by Swiss & Global Asset Management (formerly Julius Baer Asset Management) in January 2010.
• Sprott Physical Silver Trust is a closed-end fund created by Sprott Asset Management. The initial public offering was completed on November 3, 2010.

Other products

• ETFS Silver was launched by ETF Securities in September 2006 and tracks the DJ-UBS Silver Sub-Index
• db Physical Silver ETC was launched by Deutsche Bank
  Deutsche Bank
  Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
  
   in July 2010.
• PowerShares DB Silver , an ETF which holds primarily futures contracts for physical delivery, which are later sold to silver consumers in order to roll over expiring contracts to contracts further from expiration. ProShares Ultra Silver , seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London. ProShares UltraShort Silver in the corresponding 2x inverse ETF.
• UBS E-TRACS CMCI Silver Total Return ( and ) is designed to track the performance of the UBS Bloomberg CMCI Silver Total Return, less investor fees.
• Horizons BetaPro COMEX Silver ETF aims to correspond to the performance of the COMEX silver futures contract for a subsequent delivery month.

Risks

Each silver ETF, ETN, and CEF has a different structure outlined in its prospectus

Prospectus (finance)

In finance, a prospectus is a document that describes a financial security for potential buyers. A prospectus commonly provides investors with material information about mutual funds, stocks, bonds and other investments, such as a description of the company's business, financial statements,...

. Such instruments do not necessarily hold physical silver. For example, silver ETNs generally track the price of silver using derivatives

Derivative (finance)

A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...

. All exchange-traded silver instruments, including those that hold physical silver for the benefit of the investor, carry risks beyond those inherent in the precious metal itself. The most popular silver ETF (iShares Silver Trust, symbol SLV) has been compared with mortgage-backed securities due to its complexity.