The United States economy is under pressure from historically high inflation and Russia’s invasion of Ukraine, which together are threatening sharp price surges. Consumer prices have risen 7.5% in the 12 months through January, marking their highest rise in almost 40 years.
Fed Chair Jerome Powell has voiced his support for a 0.25 percentage point rate hike this month. And Jeff Gundlach, the popular investor and chief executive of DoubleLine, said, “I think we need to start admitting that we’re running into a stagflation situation.”
Because silver is a safe-haven asset and an inflation hedge, spot silver prices rallied more than 3% on Tuesday and are moving closer to the $27 per ounce level. The U.S. ban on Russian oil imports has raised concerns about stagflation and supported precious metal prices. Hence, we think the silver ETFs iShares Silver Trust (SLV) and Aberdeen Standard Physical Silver Shares ETF (SIVR) might be reasonable additions to one’s investment portfolio now, given this backdrop.
Click here to check out our Gold and Silver Industry Report for 2022
iShares Silver Trust (SLV)
SLV aims to reflect the performance of the price of silver before payment of the trust expenses and liabilities and is not actively managed. In addition, the trust does not engage in any activities to profit or reduce losses caused by silver price changes. The fund is appropriate for short-term traders.
SLV tracks the LBMA Silver Price ($/ozt) and has an expense ratio of 0.50% versus the 0.44% category average. The fund had $14.31 billion in net as of March 8, while its fund flows came in at $4.12 million over the past six months and $49.49 million over the past three months. SLV has a 1.16 beta.
The ETF has gained 13.7% year-to-date and 14% over the past month to close yesterday’s trading session at $24.45. SLV had a NAV of $24.13 as of March 8.
SLV’s strong fundamentals are reflected in its POWR Ratings. The ETF has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
SLV has an A grade for Trade and a B grade for Buy & Hold. In the 38-ETF Precious Metals ETFs group, it is ranked #19. The group is rated A.
Click here to see the additional POWR Ratings for SLV.
Aberdeen Standard Physical Silver Shares ETF (SIVR)
SIVR tracks the price of physical silver bullion (silver ETPs). Its shares are meant to be a cost-saving means of investing in silver, allowing investors to participate in the silver market through the securities market.
Tracking the LBMA Silver ($/Ozt) index, SIVR has $1.10 billion assets under management. It has an expense ratio of 0.30%, which is significantly lower than the 0.44% category average. Over the past month, SIVR’s fund flows have come in at $13.75 million, and $173.72 million over the past year.
SIVR has gained 14% in price over the past month to close yesterday’s trading session at $25.48. It has gained 17.7% over the past three months. It has a beta of 1.18 and a NAV of $25.15 as of March 8.
It is no surprise that SIVR has an overall B rating, which translates to Buy in our POWR Rating system.
SIVR has a Trade grade of A and a Buy & Hold grade of B. It is ranked #23 in the Precious Metals ETFs group.
To see the additional POWR Ratings for Peer for SIVR, click here.
SLV shares were trading at $23.80 per share on Wednesday afternoon, down $0.65 (-2.66%). Year-to-date, SLV has gained 10.65%, versus a -9.76% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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