Silver prices continue to hit record highs. How should Taiwanese retail investors enter the silver ETF market?

Silver Market Hotspot — What Investors Must Know About the Current Background

The silver market in 2025 has written a historic chapter. Driven by the Federal Reserve’s policy shift, ongoing global supply chain tightness, and the U.S. officially including silver in the critical minerals list, the London spot silver price officially broke through $60/oz on December 9, then hit a new high of $64.6/oz, with the year’s increase surpassing 100%. This performance far exceeds gold’s over 60% gain in the same period and leads the Nasdaq Composite Index by about 20 percentage points. International investment bank UBS expects the 2026 target price to remain in the $58–$60 range, with even the possibility of reaching $65.

Faced with such a strong rally, many Taiwanese investors are starting to consider entry strategies. Compared to the cumbersome process of physical silver (involving storage, insurance, verification, etc.), Silver ETFs are gradually becoming mainstream due to their ease of purchase and sale, and good liquidity.

How Silver ETFs Work — What You Should Understand First

A silver ETF is essentially an investment fund tracking the silver price, allowing investors to participate in market ups and downs without holding physical silver bars. These funds replicate market performance by directly holding physical silver or using derivatives like futures contracts—when silver prices rise by 5%, the ETF value also increases by about 5%; vice versa.

Compared to traditional physical investment, which requires self-storage, faces theft risks, and incurs annual safe deposit box costs of 1–5%, silver ETFs can be bought and sold through securities accounts with a simple transaction process and lower investment thresholds. For small investors in Taiwan, especially considering the future complexity of physical assets in inheritance tax property reference lists, the digital nature of ETFs makes asset management and financial planning more convenient.

Which ETF Should Taiwanese Investors Choose? Analyzing the Top Seven Popular Options

US Silver ETFs: The Most Well-Known Global Choice

SLV (iShares Silver Trust) is the world’s largest silver ETF, launched in 2006, with assets exceeding $30 billion. Managed by BlackRock, it adopts a passive management strategy, mainly holding physical silver, with an annual fee of only 0.50%. Since 2014, it has tracked the London Bullion Market Association (LBMA) silver benchmark price, making it a common tool for portfolio diversification and inflation hedging.

Leverage and Inverse Products: For short-term traders, ProShares offers two derivatives—AGQ (2x Long Leverage) and ZSL (2x Inverse Leverage), with annual fees of 0.95%. These products achieve multiple returns via futures contracts but are affected by compounding decay, making them suitable only for short-term trading, not long-term holding.

PSLV (Sprott Physical Silver Trust) is a special closed-end fund (established in 2010) with about $12 billion in assets. Its unique advantage is that investors can redeem physical silver upon request, and the trading price is fully determined by market supply and demand. However, note that its trading price often deviates from net asset value, resulting in premiums or discounts.

SLVP (iShares MSCI Global Silver and Metals Miners) invests in stocks of major global silver mining companies, with a low expense ratio of 0.39%, but due to stock-specific risks, it exhibits higher volatility and tracking errors, and wider bid-ask spreads.

Products Listed in Taiwan: Local Alternatives for Investors

Fubon Silver Futures ETF (00738U) launched in 2018, tracks the Dow Jones Silver Excess Return Index, achieved via COMEX silver futures, with an annual fee of 1%. Rated as “high volatility,” it offers the advantage of trading in TWD with no currency risk, but the selection of underlying assets is limited.

Choosing Your Purchase Channel: Domestic Custody vs. Overseas Account — Pros and Cons

Domestic Custody — Managed by Local Brokers

Through services from Fubon, Cathay, Yuanta, Yuanta, and others, investors can open accounts online or in person, choosing TWD or foreign currency settlement, and place orders via apps. The main advantage is regulation by the Financial Supervisory Commission, no need to transfer funds abroad, tax handling by brokers, and support for regular investment plans. The drawbacks are higher transaction fees and limited tradable products.

Overseas Accounts — Lower Costs, More Choices

Investors can open accounts online with overseas brokers, providing documents like passports and IDs, and trade global ETFs directly. This approach offers very low or zero commissions, a wide range of products, and advanced tools like options. However, they must handle U.S. dividend withholding tax (30%), set up fund transfer arrangements, and face less legal protection for inheritance issues.

Tax Considerations — Major Differences Between Domestic and Overseas Investments

Taiwan-listed Silver ETFs: Buying is tax-exempt; selling incurs a 0.1% tax, making tax handling straightforward.

Overseas Silver ETFs: Treated as overseas property transaction income, included in annual overseas income. The key threshold is NT$1 million—if total overseas income is ≤ NT$1 million, it’s exempt from the minimum tax; if exceeding, the full amount is included in the basic income, taxed at 20% (after deducting NT$7.5 million exemption). This is especially important for planning inheritance tax property lists—overseas assets should be combined with other overseas income to avoid exceeding the threshold.

Silver ETFs vs. Other Investment Methods — Which Offers Better Returns and Risks?

In 2025, the highest returns come from silver futures with high leverage (potentially over 200%), but risks are also amplified; silver mining stocks (like SIL) yield about 142%, surpassing silver price gains but with company-specific risks; physical silver bars yield about 95–100% net (after storage, premium, and selling costs); silver ETFs roughly achieve 100% net returns (tracking silver prices minus fees).

For novice investors, the best choice remains silver ETFs—they avoid physical management burdens, have relatively controlled risks, high liquidity, and avoid the complexity and leverage risks of futures. For those concerned with asset allocation and future inheritance tax property lists, the digital asset nature of ETFs facilitates clear financial records and tax reporting.

Risks Investors Must Watch When Investing in Silver ETFs

Volatility Risk: Silver prices fluctuate far more than gold and stocks, with historical rapid corrections of 30–40%, requiring high risk tolerance.

Tracking Error: Futures-based ETFs incur costs from rolling over contracts, which can cause long-term returns to lag behind spot prices; annual fees of 0.4–0.5% gradually erode gains.

Currency and Tax Risks: Overseas ETF investors face USD exchange rate fluctuations and complex overseas income tax reporting—especially when planning for inheritance. Consulting tax professionals in advance is recommended to ensure proper declaration in inheritance tax property lists.

Geopolitical and Demand Factors: Silver prices are influenced by geopolitical tensions, industrial demand (solar, electronics), and central bank policies. Regularly monitor fundamental changes.

Conclusion

Silver ETFs are a modern tool for participating in precious metals investment, offering advantages like ease of trading, high liquidity, and low management costs—especially suitable for Taiwanese retail investors to quickly establish positions during silver price rallies. However, investors should not be swayed by short-term gains; they should choose products aligned with their risk appetite (physical for stability, leveraged for aggressive strategies) and select the most cost-effective channels via domestic custody or overseas accounts.

When planning personal asset allocation, incorporating silver ETFs into the overall financial portfolio is advisable, especially considering future inheritance tax property list reporting—digital assets offer transparency and traceability, making long-term management and inheritance transfer easier than physical silver. Regularly review holdings, avoid over-concentration, and stay attentive to market changes for prudent investing.