Sprott’s Steve Schoffstall explains why pure-play matters†† for SLVR, which is the only† ETF to provide exposure to both pure-play silver miners and physical silver.
†Based on Morningstar’s universe of Precious Metals Sector Equity ETFs as of 1/14/2025.
††The term “pure-play” relates directly to the exposure that the Fund has to the total universe of investable, publicly listed securities in the investment strategy.
For the latest standardized performance, please visit the individual website pages: SLVR. Past performance is no guarantee of future results.
Video Transcript
Michelle Yu: Why does a pure-play strategy matter so much in silver mining?
Steve Schoffstall: It's particularly important in silver miners. When we go back to the byproduct story where we have a 72% being mined as a byproduct, most of the silver companies are mining other metals. If you look at the 10 largest silver miners, none of them are primary silver miners. They have other drivers of their business, and lead and zinc combined make up about 31% of their activity.
This means that when you look at other existing silver mining ETF strategies, they tend to be much more diversified. They invest in companies that don't necessarily have a lot of exposure to silver. In some cases, what we will see is that their criteria for inclusion in the index is that to be considered a silver miner, you just have to have an economic impact based on silver.
You could be looking at companies that have small, single-digit percentages of their revenue actually coming from mining silver. If you look at SLVR and its strategy and how that compares to other strategies, you'll see that the SLVR strategy has about 70% allocation to silver. That's more than twice, in some cases, what we are seeing with other strategies. Also, it has a very low overlap with other existing ETF strategies on the market, so you're getting a differentiated product. On the other hand, when you look at companies with less than 25% of their revenue tied to silver, some of the other strategies have about half their portfolio invested in those companies. Those won't meet the screen for SLVR.
Important Disclosures & Definitions
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Sprott Silver Miners & Physical Silver ETF Statutory Prospectus, which contains this and other information, visit https://sprottetfs.com/slvr/prospectus, contact your financial professional or call 1.888.622.1813. Read the Prospectus carefully before investing.
The Sprott Silver Miners & Physical Silver ETF is new and has limited operating history. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. The Fund will be concentrated in the silver mining industry. As a result, the Fund will be sensitive to changes in, and its performance will depend to a greater extent on, the overall condition of the silver mining industry, highly dependent on the price of silver bullion. The silver and precious metals industry can be significantly affected by competitive pressures, central bank operations, events relating to international political developments, the success of exploration projects, commodity prices, adverse environmental developments and tax and government regulations. An investment in the Fund involves a substantial degree of risk. The Fund is not suitable for all investors. The Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.
Shares are not individually redeemable. Investors buy and sell shares of the Sprott Silver Miners & Physical Silver ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 10,000 shares.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual Fund operating expenses, affect the Fund’s performance.
The Sprott Silver Miners & Physical Silver ETF seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the Nasdaq Sprott Silver Miners™ Index (NSLVR™).
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Sprott Asset Management USA, Inc. is the Investment Adviser to the Sprott Silver Miners & Physical Silver ETF. ALPS Distributors, Inc. is the Distributor for the Sprott ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc.
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