On the U.S. dollar rally today, precious-metals prices are taking it on the chin, as we see weakness not only in gold prices but also in silver.
The benchmark ETF in the Silver space, SLV, (Expense Ratio 0.50%, $5.7 billion) failed to breakout above its 200-day in the past couple sessions and today is sinking back to its 50-day MA, and we will see if support holds there.
Volatility in the entire Precious Metals space has been the case for the past several sessions and today’s gap higher in the U.S. Dollar threatens to take metals prices even lower should this strength hold. When we look at UUP (Expense Ratio 0.75%, $605 million in AUM), we see the fund trading at its highest levels since late July, and any sustained upside here in the dollar could help reverse the downtrend that the currency has been mired in since March. Asset flows have not been kind to UUP, as the fund has lost over $183 million to outflows year-to-date, while SLV has seen $93 million leave the fund and GLD a more substantial $1.2 billion vacate during this time frame.
The recent volatility in these segments, especially in Silver prices themselves should attract more traders to the space not only of SLV, which is by far the largest fund in the space at $5.7 billion in AUM, but in other offerings as well. Smaller funds that are currently on our radar that often have appeal to traders and portfolio managers looking to aggressively hedge portfolios or make short term directional moves include Leveraged Bull and Bear funds AGQ (Expense Ratio 0.95%, $261 million in AUM), USLV (Expense Ratio 1.65%, $255 million in AUM), DSLV (Expense Ratio 1.65%, $31 million in AUM) and ZSL (Expense Ratio 0.41%, $16.5 million in AUM).
While none of these funds are very large in terms of asset size, those looking to potentially capitalize on the recent short-term volatility in the space may very well gravitate to them, depending on which side of the “Bull/Bear” question they sit. For those simply looking for unlevered exposure to Silver, smaller but competing funds in the segment are SIVR (Expense Ratio 0.30%, $355 million in AUM), DBS (Expense Ratio 0.75%, $21 million in AUM) and USV (Expense Ratio 0.40%, $4 million in AUM).
The iShares Silver Trust ETF was trading at $15.76 per share on Tuesday morning, down $0.37 (-2.29%). Year-to-date, SLV has gained 4.30%, versus a 11.29% rise in the benchmark S&P 500 index during the same period.
SLV currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #16 of 35 ETFs in the Precious Metals ETFs category.