Global X Silver Miners ETF, the first silver mining exchange-traded fund, has traded nearly a million shares in daily volume and raised USD35m in assets in its first ten trading days.
"These results reveal a previously-unmet, large need among investors for this unique play on precious metals," says Global X Funds chief executive Bruno del Ama. "The magnitude of the market’s demand for this new investment tool is becoming more apparent as the fund grows and continued inquiries come in from institutional and retail investors."
Silver mining companies are up nearly fourfold since bottoming in 2008, and physical silver has doubled in that time.
Because the ETF invests in silver mining companies, it provides a differentiated investment profile to investing in physical silver.
According to Nick Barisheff, president of Bullion Management Group, at the beginning of a bull market mining shares typically rise and often outperform bullion.
According to commodities analysts, silver demand should remain strong as a result of both investment interest and increased use in the consumer and industrial sectors. Fifty four per cent of silver demand is industrial and silver industrial demand is expected to rise 19 per cent this year, according to BMO Capital Markets.
Some of the largest silver-focused mining companies in the Global X Silver Miners ETF include Silver Wheaton, Pan American Silver, Fresnillo, and Industrias Penoles. A number of the component companies are expected to increase silver production this year as new mines are opened, existing mines ramp up output, milling additions and re-permitting take place.
"The Global X Funds Silver Miners ETF is designed to capture this anticipated growth in demand as well as company growth across the silver mining industry," says del Ama. "This ETF allows investors to gain exposure in a way that is focused on the silver sector while benefiting from the diversification of a basket of stocks."