Silver surges 140%! ETF investment strategies that Taiwanese investors must understand

The white silver market in 2025 is considered a historic breakthrough. Supported by multiple positive factors such as expectations of Federal Reserve rate cuts, global supply shortages, and the official inclusion of silver in the U.S. critical minerals list, the London spot silver price broke through the $70 per ounce mark on December 23, reaching a record high of $83.645/ounce.

The annual increase has exceeded 140%, far surpassing gold’s over 60% gain and significantly outpacing the Nasdaq Composite Index’s approximately 120% rise. However, with CME recently raising margin requirements twice in a row (announcing another increase on December 26), silver prices retreated to the $70-75 range at year-end, providing a relatively ideal entry point for investors who have not yet entered the market.

Faced with this trend, many Taiwanese investors are beginning to consider how to participate, and Silver ETFs have become the retail choice due to their trading convenience.

What is a Silver ETF? Why is it suitable for beginners?

Simply put, a Silver ETF is an investment fund that tracks the price of silver, allowing you to participate in the silver market without holding physical silver. It is listed and traded on stock exchanges, making buying and selling as simple as trading stocks.

Compared to many inconveniences of physical silver investment—high storage costs, expensive insurance, poor liquidity, large bid-ask spreads—Silver ETFs offer a more accessible way to participate. You only need a brokerage account to buy or sell anytime, without worrying about silver storage, purity verification, or theft risks.

How does a Silver ETF track silver prices?

Silver ETFs mainly operate in two ways: one is holding physical silver bars directly, and the other is investing in futures contracts and derivatives linked to silver prices. Regardless of the method, the ETF’s net asset value (NAV) will fluctuate in sync with the market silver price—if silver rises 5%, the ETF value also increases about 5%.

What are the common Silver ETFs? A quick overview

Want to invest in Silver ETFs but unsure where to start? Here are 7 of the most popular options in the market:

Detailed analysis of each ETF

SLV—The leader among global silver ETFs

Launched in 2006, managed by Blackrock, it is the most liquid and largest silver ETF in the market. It adopts a passive management strategy, directly holding physical silver, with custody by JPMorgan Chase. Since it does not actively buy or sell silver but periodically sells small amounts to cover operating costs, tracking error is minimal, making it especially suitable for long-term holders.

AGQ—A high-risk, short-term aggressive tool for high returns

Achieves 2x leverage through futures contracts, meaning if silver prices rise 1%, AGQ could rise 2%; vice versa. Due to compounding effects and long-term holding costs, this fund is only suitable for short-term trading. Holding it for more than a month can erode returns due to time decay.

PSLV—A physical silver alternative for long-term investors

This is the largest silver-themed closed-end fund (assets about $12 billion), issuing fixed units, with trading prices determined by supply and demand, often trading at premiums or discounts. Its advantage is exposure to pure physical silver, with the ability to redeem physical silver. The downside is that trading prices may deviate from NAV.

SLVP—Mining stocks investment approach

Invests in major global silver mining companies, with a fee rate of 0.39%, the lowest among all ETFs. However, it exhibits much higher volatility, noticeable tracking errors, and larger bid-ask spreads, making it less attractive from a return perspective.

Taiwan Silver Futures ETF (00738U)—A local choice for Taiwanese investors

Established in 2018, listed in Taiwan, it tracks the Dow Jones Silver Excess Return Index via COMEX futures. Its advantage is that it can be purchased directly through Taiwan stock accounts, avoiding currency exchange issues; its disadvantage is lower liquidity compared to international products, with relatively smaller trading volume.

How to buy Silver ETFs? Two main methods compared

Method 1: Via a domestic securities firm (recommended for beginners)

Trade through domestic brokers (like Fubon, Cathay, Yuanta, Yuanta, etc.) with overseas brokers.

Simple steps:

• Open a cross-border trading account with a domestic broker (online or in person)
• Choose TWD or USD settlement
• Search for ETF code (e.g., SLV) on the app and place an order; many brokers support regular fixed investments

Advantages: Regulated by the Financial Supervisory Commission, safe and secure; handling fees deducted by broker; tax assistance; funds stay within Taiwan

Disadvantages: Higher transaction fees; limited tradable products

Method 2: Direct account opening with an overseas broker (cost-control approach)

Skip middlemen, trade directly through an overseas broker.

Steps:

• Open an account online with an overseas broker (prepare passport, ID, proof of address, bank info)
• Transfer funds (convert TWD to USD via wire transfer)
• Use their app or website to place orders

Advantages: Lowest fees (many offer commission-free or low fixed fees); broader product selection; support advanced tools (options, margin trading)

Disadvantages: Interface mainly in English; US withholding tax of 30% on dividends, need to declare; remittance and tax complexities; no legal protection under Taiwan law

Do I need to pay tax when investing in Silver ETFs?

Buying Taiwan-listed Silver ETFs (like 00738U): Treated as stock trading, exempt from tax on purchase, 0.1% tax on sale, most straightforward.

Buying overseas Silver ETFs (like SLV, AGQ, etc.): Counted as overseas income, if total annual income ≤ NT$1 million, not included in minimum tax base; exceeding NT$1 million, all included in basic income, taxed at 20% after deducting NT$7.5 million exemption.

Silver ETF vs. other investment methods—return and risk comparison

From the table, 2025 silver futures could yield the highest returns but with the greatest risk. Silver ETFs offer slightly lower returns but are more suitable for beginners and small investors due to no storage needs and more manageable risk.

Three major risks of investing in Silver ETFs

1. Price volatility far exceeding expectations

Silver is much more volatile than gold and stocks. Although it rose 140% in 2025, historical data shows sharp corrections. After margin increases took effect on December 29, international silver prices plunged over 11% in a single day, causing heavy losses for many investors. This indicates that Silver ETFs are more suitable for investors with high risk tolerance.

2. Tracking error issues

Futures-based ETFs are affected by roll costs, potentially resulting in returns lower than spot over the long term; physical-backed ETFs are more accurate but incur annual fees of 0.4-0.5%, gradually eating into gains. Investors need to balance fee transparency and tracking accuracy.

3. Currency and tax risks

Overseas ETFs face exchange rate risks, and silver prices are influenced by geopolitical factors, industrial demand (solar, electronics), and global monetary policies. Tax reporting can also become a hidden long-term holding cost.

Investment recommendations

Silver ETFs are indeed effective tools for participating in the silver market—eliminating the hassle of physical storage, offering liquidity and trading convenience. But remember, silver prices are highly volatile, easily affected by industrial supply/demand and speculative sentiment. Different ETFs vary in fees, tracking methods, and leverage use.

Adopt a diversified allocation strategy, avoid over-concentration in a single product, regularly review positions and market changes, and choose products aligned with your risk tolerance. Beginners can start with SLV or Taiwan-listed 00738U, and after gaining experience, explore leveraged or inverse products.