Silver ETF Starts Off the Year Strong: Can It Continue to Shine?

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SLV is too young to have produced any reliable risk measurement data, but silver prices are notoriously volatile, and there’s every reason to think this fund’s performance will be as equally prone to gyrations as the commodity, itself.

iShares Silver Trust (SLV) outperformed every other ETF focused on metals during the first quarter of 2008—indeed, it was one of the top-performing ETFs across the entire market. SLV’s nearly 21% return even outperformed gold funds during a period when the price of gold topped $1,000 per ounce for the first time in history.

The fund easily outpaced the stock market as well. The first quarter was one of the market’s worst in recent history, as losses swept across almost every type of stock and the S&P 500 posted a 9.5% decline. A handful of commodities bucked the trend, causing commodities-oriented ETFs to cluster at the top of the ETF Momentum Tracker Table. SLV last week held the top spot for the eighth consecutive week. Despite losing some steam in recent weeks, the fund remains one of the hottest ETFs on the table...

When the stock market is hurting, silver’s lack of correlation with the stock market makes its volatility a bit easier to bear. Make no mistake—SLV is certainly independent and volatile. While the MSCI EAFE index of foreign stocks lost 3.12% for the 12 months ending April 18 and the S&P 500 lost 3.70%, SLV shot up more than 27%. Similarly, SLV plummeted nearly 9% during the month ending April 18, while the EAFE gained almost 7%. SLV is too young to have produced any reliable risk measurement data, but silver prices are notoriously volatile, and there’s every reason to think this fund’s performance will be as equally prone to gyrations as the commodity, itself.

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