uploads/2016/08/silver-fund-1.jpg

A Look at the Performance of Silver Funds

By

Updated

Precious metal funds

The rally in gold and silver this year has been significant due to the haven bids from the unrest in the markets. The bids for silver have been certainly higher than gold. Gold has seen a year-to-date rise of 26%, and silver has risen 36%. Platinum and palladium have also been significantly higher by 23.7% and 24.3%, respectively, year-to-date.

According to Commerzbank, silver ETFs had their largest daily inflows since the beginning of July on Monday, August 22, 2016. Their holdings hit a record high of 20,670 tons.

The famous silver-based fund is the iShares Silver Trust (SLV). The holdings of the SPDR Gold Trust (GLD), the world’s largest gold-backed ETF, rose 0.25% to 958.4 tons on Monday. SLV and GLD have risen 25.9% and 35.9%, respectively, YTD, taking from gold and silver.

The comparative performance of silver over gold may likely be better due to the dual industrial and precious metal use of silver.

Article continues below advertisement

Silver miners

As you can see in the above chart, money flowing to precious-metal-based funds increased substantially after the Brexit vote and shook the world markets. Investors took a flight to safety to these haven assets, and gold- and silver-based funds benefited.

Mining shares that have seen positive returns over the past month, despite slowly falling precious metals, include Coeur Mining (CDE), Silver Wheaton (SLW), and Hecla Mining (HL). These three shares rose 8.8%, 9.0%, and 5.2%, respectively. They have, however, seen a loss over the past five trading days due to the fear of a possible interest rate hike. Combined, these three miners contribute 6.8% to the changes in the VanEck Vectors Gold Miners ETF (GDX).

Advertisement

More From Market Realist