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Big Silver ETF Added Money, Drama This Year

December 23, 2016 9:44 am
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As is the case with other precious metals exchange-traded funds, the year-to-date performance by the iShares Silver Trust (ETF) (NYSE: SLV) looks pretty good.

SLV, the largest silver ETF by assets, is up 13.5 percent year-to-date, but looks can be deceiving. The rising dollar, the Federal Reserve's first interest rate hike of 2016 earlier this month, the notion of three more rate hikes next year and Donald Trump's surprising victory in the November presidential election are among the factors conspiring to derail silver and SLV.

Silver Bells, Silver Bells

But if 2016 ended today, SLV would at least be inflow positive.

“The largest Silver based ETF in the marketplace, SLV (iShares Silver, Expense Ratio 0.50 percent, $5.3 billion in assets under management) has managed to put together a prosperous run in terms of gathering assets in 2016 in spite of huge volatility in the price of the underlying metal and in Precious Metals in general, packing in more than $450 million in new assets year-to-date via creation flows,” said Street One Financial Vice President Paul Weisbruch in a note out Thursday.

However, SLV resides 24 percent below its 52-week high seen in August, putting the ETF in bear market territory, and it would take some work for the big silver ETF just to reclaim its 200-day moving averages. SLV resides 11.1 percent below that important technical indicator. Similar scenarios are seen for major silver miners ETFs, which still sport impressive year-to-date gains, but have also recently been punished.

Leveraged Silver ETF

The ProShares Ultra Silver (ETF) (NYSE: AGQ), a leveraged play on silver, is an ETF to remember for the adventurous trader, though AGQ has recently been plagued by poor performance and has lost money this year.

“The sudden sell-off in Silver and other Precious Metals has penalized those whom may have been long “Levered Bull” products in the space such as AGQ (ProShares Ultra Silver, Expense Ratio 0.95 percent, $256 million in AUM, -$8.7 million in outflows YTD),” added Weisbruch.

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