Sprott Inc. has introduced the Sprott Silver Miners & Physical Silver ETF (NASDAQ: SLVR), positioning itself to provide investors with a unique opportunity to gain exposure to silver miners and physical silver. The ETF arrives at a critical moment when silver's industrial demand is rapidly expanding, particularly in green economy applications.
Silver's investment appeal has strengthened significantly in 2024, with the metal returning 20.58% and experiencing growing industrial demand. The Silver Institute estimates industrial demand rose 7% in 2024, surpassing 700 million ounces for the first time, primarily driven by green economy applications. This surge contributed to a physical deficit for the fourth consecutive year, briefly pushing silver prices to $35, a level not seen since 2012.
The new ETF distinguishes itself by focusing exclusively on primary silver miners, offering investors double the silver exposure compared to other silver mining ETF strategies. This targeted approach is crucial, given that in 2023, only 28.3% of silver was produced from primary silver mines, with the majority coming as a by-product of gold, copper, and lead/zinc operations.
Macroeconomic conditions further enhance silver's attractiveness. Sprott notes that historical patterns show silver and gold typically rally during periods of currency debasement, inflation, falling interest rates, and economic recoveries. Notably, silver has historically outperformed gold, with its rally averaging twice that of gold during precious metals bull markets.
As the global economy transitions toward low-carbon technologies, silver's role becomes increasingly critical. Its essential use in solar panels, electric vehicles, and other green technologies positions the metal as a potential beneficiary of ongoing electrification efforts. The SLVR ETF offers investors a strategic vehicle to participate in this technological transformation.
