The “Stellar”
Precious Metal
Silver
Silver is widely regarded as one of the world’s most versatile precious metals1. The most commonly
encountered form of silver is “sterling,” which is 92.5% pure. In fact, the word “sterling” is derived
from the Old English “steorra,” meaning star. This is believed to be due to the influx of new coins
with a small star entering circulation in 11th century England following the Norman Conquest.
Silver has also come into its own as an investment, providing financial advisors with many reasons
for including it in client portfolios. To better familiarize you and your clients with the “other shiny
metal,” here are a few salient facts about silver.
news you can use: An ETF Securities Commentary
2
supply & demand
il
du c
ro
sup
ep
ls
ve
r
t i on
80%
ua
of a n n
More than 80% of annual silver supply
comes from mine production, with recycling comprising most of the residual.
It may also be thought of as a secondary
metal since 75% of mined silver comes as
a by-product of mining for other metals,
such as lead, zinc, copper, and gold. In
2015, worldwide silver mine production
ply c
om e s f r om
mi
n
increased for a 13th consecutive year to
a record high of 886.7 million ounces,
although the rate of growth, at two percent, was less than half that of the previous three years. Notable country-level increases included Peru, Argentina,
Russia and India.
The majority of silver’s demand stems from3:
48-56%
25-29%
20-24%
industry &
technology
investments
jewelry &
silverware
Silver’s unique characteristics include its outstanding thermal and
electrical conductivity, along with
its ductility, malleability, optical
reflectivity and antibacterial
properties. These features make the
precious metal invaluable as an input in myriad industrial applications
including electrical components,
batteries, photovoltaics (solar
panels), auto parts, pollution
abatement technology, ethylene
oxide (an important chemical
precursor), as well as brazing
alloys and solders.
Retail bar and coin purchases are
additional sales drivers for silver
globally, with top demand coming
from India and the United States.
Like gold, the adoption of physically
backed exchange traded products
(ETFs) in recent years has expanded
demand and accessibility for
investors to gain exposure to silver.
Jewelry remains a core source of
demand for silver and likely its most
commonly known usage. Silver is
often used a primary metal in
jewelry, as well as a component for
gold alloys, such as white gold.
did you know ?
4
Ag
THE CHEMICAL SYMBOL FOR SILVER, AG, COMES FROM THE
LATIN WORD, “ARGENTUM”, WHICH MEANS SHINING
THE COMPOUND SILVER IODIDE HAS BEEN USED FOR CLOUD SEEDING, WHICH CAUSE CLOUDS
TO PRODUCE RAIN AND TRY TO CONTROL HURRICANES
THE WORDS FOR ‘SILVER’ AND ‘MONEY’ ARE THE SAME IN OVER
FOURTEEN DIFFERENT LANGUAGES
portfolio considerations
Silver is a risk management tool since it helps
diversify equity exposure and equity risk. It’s
also a proven hedge against event and tail risk.
Like gold, silver acts as a quasi-currency given
its historical usage by governments as money.
Silver is also considered a hard asset and can
be effective as a store of value by preserving
purchasing power5.
key drivers for silver include:
6
GOLD
With a correlation of over 80% to gold, silver rides on the yellow metal’s coat-tails, usually
moving the same direction, but making larger movements in both directions7.
MONETARY POLICY
Silver is likely to be a beneficiary of continuing loose monetary policy as investors seek
hard assets that cannot be debased.
ECONOMIC CYCLE
Silver’s varied applications can help support its price when growth cycles in one
industry are weaker than in others. It’s also closely correlated to the economic business
cycle and industrial demand. The majority of demand (over 70%) comes from cyclical
sectors (industrial and technological), positioning silver to benefit from the drive
to energy efficiency.
our product
ETFS Physical Silver Shares (SIVR)
SIVR provides cost-effective, convenient access to silver in the form of physical bars held in a secured vault in London, which is inspected twice a year. Silver can be seen in such prosaic products as jewelry and silverware, as well as coins and medals, though the
majority (55%) of silver’s usage worldwide is in industrial applications. Only 1/3 of silver production is derived from silver mines;
the rest—roughly 75%—is a byproduct of mining for other metals, most notably lead, zinc, copper, and gold8. Of the white metals,
silver also tracks gold most closely, boasting a correlation of 0.8 over the past five years9.
As of June 3o 2016
Inception Date
Expense Ratio
Assets Under Management
Creation Unit Size
Vault Location
Custodian
Trustee
July 23, 2009
0.30%
$378,150,917.57
100,000 shares
London, United Kingdom
HSBC Bank Plc
The Bank of New York Mellon
news you can use: An ETF Securities Commentary
1
Mining Global 7.15.15
2
The Silver Institute, May 2016
3
Metals Focus Silver Focus 2016, ETF Securities
4
http://chemistry.about.com/od/10elementfacts/fl/10-Silver-Facts.htm
5
ETF Securities, 7.21.16
6
ETF Securities, What Really Drives White Metals Prices
7
ETF Securities, 7.21.16
8
Metals Focus, May 1, 2016
9
Bloomberg, July 31, 2016
DISCLOSURE
The ETFS Silver Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity
Exchange Act. Shares of the Silver Trust are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors.
Trusts focusing on a single commodity generally experience greater volatility. There are special risks associated with short selling and margin investing. Please ask
your financial advisor for more information about these risks.
The value of the Shares relates directly to the value of the silver held by the Trust and fluctuations in the price of silver could materially adversely affect an investment in the
Shares. Several factors may affect the price of silver including: (1) A change in economic conditions, such as a recession, can adversely affect the price of silver. Silver is used
in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares; (2)
Investors’ expectations with respect to the rate of inflation; (3) Currency exchange rates; (4) Interest rates; (5) Investment and trading activities of hedge funds and
commodity funds; and (6) Global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of silver
producing companies, it could cause a decline in world silver price, adversely affecting the price of the Shares.
Commodities and futures generally are volatile and are not suitable for all investors. Shares in the Trust are not FDIC insured and may lose value and have no bank
guarantee.
Investors buy and sell shares on a secondary market (i.e., not directly from trust). Only market makers or “authorized participants” may trade directly with the fund,
typically in blocks of 50k to 100k shares. The Fund’s net asset value per share (NAV) is calculated by dividing the value of the Fund’s total assets less total liabilities by the
number of shares outstanding. Market Price returns are based on the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were
traded at other times.
Carefully consider the fund’s investment objectives, risk factors, and fees and expenses before investing. For further discussion of the risks associated with an investment in the funds please read the prospectus at www.etfsecurities.com/etfsdocs/USProspectus.aspx. Or visit the ETF Securities website:
www.etfsecurities.com.
ALPS Distributors, Inc. is unaffiliated with HSBC Bank Plc and The Bank of New York Mellon.
ETFS Silver Trust shares are not guaranteed by HSBC Bank Plc or anyone else: ETFS Silver Trust shares are direct, limited recourse obligations of the Trust alone and not
obligations of any other person including HSBC Bank Plc, N.A., or any member of the HSBC Bank Plc or its affiliates.
ALPS Distributors, Inc. is the marketing agent for ETFS Silver Trust.
ETF001049 10/31/2017
ETF Securities (U.S.) LLC
t: 1-844-ETFS-BUY (844-383-7289)
e: [email protected]
w: www.etfsecurities.com