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A Small Silver Fund with a Big Return

Exchange-traded fund (ETF) expert Doug Fabian shares his take on a small, but appealing silver fund.

In last week‚??s ETF Talk, I covered a $7 billion gold mining fund that invests in large-cap companies to provide less risk and more stable returns than some of its exchange-traded fund (ETF) competitors. This week, I‚??d like to turn in the opposite direction and discuss the iShares MSCI Global Silver Miners ETF (SLVP), a small silver fund with $44 million in total assets.

This fund invests in silver mining companies across the world, holding a diversified portfolio of 36 different companies. That being said, SLVP has relatively small holdings in most of these 36 companies. However, the top two companies, Silver Wheaton Corporation (SLW.TO) and Fresnillo PLC. (FNLPF.L), together comprise over a quarter of the fund‚??s assets, with 18.14% and 8.76%, respectively. Going down the list, the portfolio also includes Tahoe Resources Inc. (TAHO.TO), 7.97%; First Majestic Silver Corporation (AG.TO), 5.88%; Buenaventura Mining Company Inc. (BVN), 4.99%; Hecla Mining Company (HL), 4.71%; and others.

Year to date, SLVP has performed outstandingly, posting a gain of 95.25%. Put side-by-side with the S&P 500‚??s year-to-date gain of 2.26%, SLVP‚??s performance can only be described as impressive.

As you can see from the graph below, SLVP started the year off slow, but exploded over the most recent three months. In fact, its return for the last 100 days is 88.89%. Even in just the last month it has risen 40.1%. The fund pays a 0.35% dividend and its expense ratio is 0.39%.

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View the current price, volume, performance and top 10 holdings of SLVP at ETFU.com.

The idea behind SLVP is to invest in companies whose performances are closely linked to the underlying price of silver. What this means is that when silver prices increase, investors will most likely see a bigger increase in their returns from SLVP. Since SLVP invests in different companies around the world, it is exposed to additional risks, such as currency risks and local risks for each of its companies.

Essentially, investing in SLVP could be ideal for those who are bullish on silver and are seeking a magnified gain from it. If this sounds like you, I encourage you to research the iShares MSCI Global Silver Miners ETF (SLVP) further.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert‚??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

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