Physical silver vs silver ETFs.

We're a dealer in physical metal, so we don't recommend funds, and nothing here is investment advice. These are the main U.S.-listed funds backed by physical silver, with the fees and custodians their filings state:

What you own

• An ETF share is an interest in a trust that holds the metal. You don't own particular bars, and ordinary shareholders can't exchange shares for metal: only large "authorized participants" redeem, in blocks of tens of thousands of shares. Sprott's PSLV is an exception: holders of at least 10 large bars' worth can redeem for silver monthly, paying the delivery costs and the Mint's fees.
• Coins and bars are yours outright. You can hold them, move them, and sell them to any dealer, with no fund or custodian in between.

What each costs

• ETFs charge a yearly fee, paid by selling or handing over a little of the trust's metal, so each share holds a little less silver every year. You also pay brokerage commissions and the bid-ask spread when you trade.
• Physical metal costs a premium over the spot price when you buy and a spread when you sell, plus storage and insurance if you use them. There's no yearly fee.

Which costs less depends on how long you hold. See physical premiums vs ETF fees for the numbers.

Risks the funds disclose

Each fund's annual report lists its risks. Among them:

• Custodian risk: the metal is held by a bank custodian whose liability is limited, and shareholders can't make claims against it directly.
• No insurance for the trust: the trusts don't insure their metal, and any insurance the custodian carries isn't for the trust's benefit.
• Not a regulated fund: the trusts aren't registered under the Investment Company Act of 1940, so its protections don't apply.
• Premiums and discounts: shares can trade above or below the value of the metal behind them, and PSLV has traded at a discount to its asset value on every trading day this year, according to Sprott.
• Dependence on authorized participants: if they step back, creating or redeeming shares can be suspended.
• Fees and termination: the fee steadily reduces the metal per share, and if a trust is wound up, holders are generally paid in cash, not metal.

Physical metal has its own risks: theft or loss if you store it yourself, storage costs, and counterfeits from unreliable sellers. The FBI has warned of counterfeit bullion coins entering the U.S.

How each is taxed

For U.S. holders, coins and bars are collectibles, and so are shares of the grantor-trust ETFs, which are treated as if you owned your share of the metal: long-term gains are taxed at no more than 28%. The trusts' monthly sales of metal to pay fees are also small taxable events. PSLV is different: it's a Canadian trust taxed as a passive foreign investment company, with its own reporting rules; see its prospectus. See taxes on selling silver.

General information from the funds' filings, not investment or tax advice.

Sources

• iShares Silver Trust (SLV), annual report or prospectus on SEC EDGAR.
• abrdn Physical Silver Shares ETF (SIVR), annual report or prospectus on SEC EDGAR.
• Sprott Physical Silver Trust (PSLV), annual report or prospectus on SEC EDGAR.
• CFTC, precious metals investor brochure.
• FBI Internet Crime Complaint Center, counterfeit bullion public service announcement, September 2021.
• IRS, Topic 409, and 26 U.S.C. §1(h) (28% maximum rate on collectibles gain).

Guides: Physical premiums vs ETF fees · Physical gold vs ETFs · Physical platinum vs ETFs · Physical palladium vs ETFs · How to buy silver · How to store it · All guides

The highest payouts for your silver, at a published percentage of the live Kitco bid.