Silver prices hit a new high again, and the discussion around it has been really intense lately. Recently, I’ve noticed many people starting to pay attention to how to enter this market trend, and it’s not just about buying physical silver bars; in fact, many Taiwanese investors are turning to silver ETFs, which are more convenient tools.

Honestly, participating in the silver price rally through silver ETFs is indeed more straightforward. No need to store the physical silver yourself, no worries about oxidation or theft, and you can buy and sell anytime during trading hours just like stocks. The liquidity is also much higher. That’s why, during this surge in silver prices, silver ETFs have become the first choice for retail investors.

The concept behind silver ETFs is actually simple: they are funds that track the price of silver. Some directly hold physical silver bars, while others use futures contracts or other derivatives to replicate the movements of silver prices. When silver prices go up by 5%, the ETF’s net asset value also roughly increases by 5%, and vice versa. This eliminates the costs of storing physical silver, insurance fees, and the bid-ask spread issues.

Currently, there are quite a few silver ETF options available in Taiwan. SLV is the most well-known globally, managed by BlackRock, directly holding physical silver, with assets exceeding 30 billion USD and a fee rate of 0.5%. If you want leverage, AGQ offers 2x leverage, and ZSL is 2x inverse. However, these two are more suitable for short-term trading and not for long-term holding. PSLV has a feature where investors can redeem physical silver, making it suitable for those who truly want actual silver. There’s also the Taiwan-listed Silver Bullion ETF, which tracks the Dow Jones Silver Excess Return Index, with a fee rate of 1%.

To buy silver ETFs in Taiwan, investors mainly have two options. The first is through domestic securities firms’ custodial agency services, such as Fubon, Cathay, Yuanta, and Fubon, which offer easy account opening, Chinese interfaces, funds kept in Taiwan, slightly higher transaction fees but lower risk, and tax handling assistance. The second is to open an overseas brokerage account, which is much cheaper in fees, offers more products, but requires handling remittances yourself, dealing with English interfaces, and researching tax matters on your own.

Tax considerations are also important. Buying Taiwan-listed silver ETFs is taxed as Taiwan stocks, with a 0.1% transaction tax upon selling. For US-based ETFs, it’s considered overseas income, and if your total overseas income exceeds 1 million TWD in a year, it needs to be included in your basic income calculation, taxed at 20%.

However, while silver ETFs are convenient, risks cannot be ignored. Silver prices are far more volatile than gold and stocks, with over 140% growth in 2025, but historically, there have also been sharp corrections. ETFs themselves have tracking errors; futures-based ETFs incur costs from rolling contracts, which can lead to lower long-term returns compared to spot holdings. Physical ETFs are more accurate but have annual fees that eat into returns. Additionally, foreign ETFs involve exchange rate risks and tax issues.

Overall, silver ETFs are a good choice for those who want to participate in silver price movements without the burden of managing physical silver. But it’s essential to understand your risk tolerance and not get carried away by the rally. The best approach is diversification, regularly reviewing your positions, and not putting all your chips into a single product.