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.
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Exchange Traded Funds (ETFs) are considered to have continuous liquidity because they allow for an individual to trade throughout the day, which may indicate higher transaction costs and result in higher taxes when fund shares are held in a taxable account.
The funds are non-diversified and can invest a greater portion of assets in securities of individual issuers, particularly those in the natural resources and/or precious metals industry, which may experience greater price volatility. Relative to other sectors, natural resources and precious metals investments have higher headline risk and are more sensitive to changes in economic data, political or regulatory events, and underlying commodity price fluctuations. Risks related to extraction, storage and liquidity should also be considered.
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The Sprott Active Metals & Miners ETF, Sprott Active Gold & Silver Miners ETF and the Sprott Silver Miners & Physical Silver ETF are new and have limited operating history.
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