In a silver exchange-traded fund (ETF) marketplace often dominated by either physical funds or mining-focused strategies, Sprott Asset Management has introduced a hybrid approach that bridges both worlds. The firm’s newest fund, Sprott Silver Miners & Physical Silver ETF (ticker: SLVR), delivers what the firm says is twice the silver exposure of other U.S.-listed silver mining ETF strategies while incorporating physical silver to help dampen volatility.
The fund marks Sprott’s first addition to its precious metals mining ETF lineup since 2015 and brings the firm’s total U.S.-listed ETF offerings to 10.
In an interview with The Wealth Advisor’s Scott Martin, Steve Schoffstall, Director of ETF Product Management at Sprott, explained how SLVR’s dual strategy gives advisors a powerful tool that combines the upside potential of silver mining companies with an allocation to physical silver, offering a more balanced approach—a combination unique among U.S.-listed silver ETFs.
Understanding Silver’s Dual Nature
At the root of SLVR’s investment thesis is silver’s evolving role in the global economy, straddling both precious metals and industrial demand. The industrial component has become increasingly dominant. According to the Silver Institute’s World Silver Survey 2024, industrial demand for silver reached a record high of 654.4 million ounces in 2023, driven by sectors such as electronics, energy, automotive, healthcare, and other industrial applications. As Schoffstall explains, the versatility stems from silver’s being “the most conductive metal on earth.”
“When you start thinking about electronics and technology with high conductivity demands, we see silver being used there,” he says.
The increasing demand has positioned silver at the center of multiple transformative technologies. “Not only does it fit the broader economy, but it also really fits into two areas that are high-growth aspects of the global economy,” Schoffstall notes, pointing directly to nuclear power and artificial intelligence.
Control rods in nuclear reactors are made with an alloy that is about 80% silver, and silver is also used in semiconductor chips essential for AI development, both crucial applications that position silver at the forefront of two rapidly growing sectors.
The green energy transition is significantly boosting silver demand as well, particularly from the photovoltaics essential to the solar industry. In 2015, solar panel production accounted for 6% of global silver demand, which increased to approximately 16% by 2023. The U.S. solar industry also experienced record growth in 2023, with a 74% increase in installed capacity, signaling continued demand for silver in this sector.
As industrial applications continue to expand and precious metals demand remains strong, silver’s role in the global economy appears poised for further growth. The metal’s increasing importance in technologies from solar panels to AI chips, combined with its traditional role as a store of value, creates a compelling long-term investment opportunity.
A Supply-Constrained Market
While demand continues to expand, Schoffstall adds that silver supply faces structural constraints. Mine production has been stagnant since 2015, reflecting broader underinvestment in the metals and mining sector during the 2010s. According to the Silver Institute’s World Silver Survey 2024, global mine production declined by 0.5% in 2023, continuing a trend of stagnation that has persisted for several years.
Complicating the supply picture is silver’s nature as primarily a byproduct metal—approximately 72% comes from mines focused on harvesting other metals such as lead and zinc, according to the Silver Institute’s World Silver Survey 2024.
This supply dynamic has influenced SLVR’s pure-play approach to silver mining exposure. The fund targets “predominantly silver miners,” which derive at least 50% of their revenue or assets from silver mining, Schoffstall notes. A smaller allocation of up to 15% can include companies deriving 25–50% of revenue or assets from silver mining. This focus aims to provide investors with maximized exposure to silver price movements while avoiding dilution from companies where silver is a minor revenue source.
Portfolio Construction and Management
Unlike other silver mining ETF strategies, SLVR incorporates a physical component making up approximately 17.5% of the index at each semiannual rebalance, Schoffstall notes.
“The physical component of silver that we do have in the ETF is great because it can help temper that volatility that we get with some of these smaller names in there,” he explains, “as well as add some liquidity to the portfolio.”
The fund’s approach to smaller mining companies reflects a key advantage of the ETF structure. “One of the great things about the ETF wrapper is that it provides exposure to a lot of those names, which might be smaller in market cap, which investors might have difficulty in accessing on their own,” Schoffstall notes. “It allows the ETF to pull all of those smaller names into a much more tradable and diversified basket that might otherwise be unavailable to most retail investors.”
The combination of physical silver and carefully selected mining companies creates what may potentially be an optimal vehicle for silver exposure, balancing growth opportunity with volatility management.
Portfolio Integration and Performance Metrics
For advisors considering silver allocation within client portfolios, Schoffstall notes that some advisors allocate up to 20% to precious metals overall, with individual silver allocations determined by client needs.
The miners’ diversification benefits are compelling, with correlations below 0.5 to the S&P 500 and under 0.4 to bonds, plus a negative correlation to the U.S. dollar. These low correlations suggest silver miners can provide meaningful portfolio diversification, potentially reducing overall portfolio volatility while maintaining exposure to both precious metals and industrial growth trends.
The long-term price appreciation has been significant. “If you go back to 2000, at the turn of the century, we saw a silver price of around $5 an ounce, a little less than that. Today, we’re up around $30 an ounce, depending where the market’s at on any given day,” Schoffstall says. “What we’ve seen is about a 7% annualized growth over the first quarter of this century.”
The historical performance, combined with silver’s dual role as both a precious metal and industrial commodity, positions it as a potentially valuable portfolio component for advisors seeking both diversification and growth exposure.
Market Conditions Support Launch
Multiple economic and market factors create a favorable environment for SLVR’s debut. Silver’s price movements are influenced by several current economic trends, including inflation concerns, interest rate dynamics, broader economic recovery patterns across global markets, and geopolitical risks, all of which support continued demand for precious metals.
For advisors worried about liquidity, Schoffstall emphasizes that ETF liquidity primarily stems from the underlying securities. “What we’ve assembled here is a basket that does have liquidity screens at the index level,” he says. “From a liquidity standpoint, we feel really good about what’s been put out there.”
The launch is consistent with Sprott’s strategic approach to product development, requiring both alignment with the firm’s expertise and clear investment rationale. As Schoffstall puts it, “There has to be an investment reason for it or a need. We think SLVR really checks that box.”
Implementing SLVR in Client Portfolios
For advisors evaluating SLVR, the fund offers several distinct advantages over traditional silver exposure vehicles. Its hybrid approach combining miners and physical silver provides enhanced exposure to silver price movements while potentially dampening volatility. The focus on pure-play miners maximizes silver exposure, while the physical component adds stability and liquidity to the portfolio.
The fund’s timing aligns with multiple supportive factors for silver prices, from growing industrial demand to traditional precious metals drivers. Advisors seeking to position client portfolios for both the energy transition and potential market volatility might find that SLVR offers a unique solution that bridges both objectives.
Moreover, the ETF structure provides tax efficiency and trading flexibility, particularly valuable given the fund’s focus on smaller mining companies that might be difficult for investors to access directly. This combination of focused exposure, volatility management, and structural efficiency can make SLVR a compelling option for advisors looking to optimize their clients’ precious metals and industrial metals exposure.
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Additional Resources
- Contact Sprott Asset Management
- SLVR Fact Sheet
- Investor Presentation
- SLVR Summary Prospectus
- Sprott Radio Podcast: Silver 2025
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Important Disclosures
Correlation is a statistic that measures the degree to which two securities (or asset classes) move in relation to each other. Pure play relates directly to SLVR’s exposure to the total universe of investable, publicly-listed securities in the investment strategy. Nasdaq Sprott Silver Miners™ Index is designed to track the performance of a selection of securities in the silver industry, including silver producers, non-producers, and physical silver. S&P 500 is a stock market index that tracks the performance of 500 of the largest U.S. publicly traded companies.
One cannot invest directly in an index. This information does not constitute an offer or solicitation and may not be relied upon or considered to be the rendering of tax, legal, accounting or professional advice.
An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a Sprott Silver Miners & Physical Silver ETF Statutory Prospectus, which contains this and other information, visit https://sprottetfs.com/slvr/prospectus, contact your financial professional or call 1.888.622.1813. Read the Prospectus carefully before investing.
The Sprott Silver Miners & Physical Silver ETF is new and has limited operating history. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. The Fund will be concentrated in the silver mining industry. As a result, the Fund will be sensitive to changes in, and its performance will depend to a greater extent on, the overall condition of the silver mining industry, highly dependent on the price of silver bullion. The silver and precious metals industry can be significantly affected by competitive pressures, central bank operations, events relating to international political developments, the success of exploration projects, commodity prices, adverse environmental developments and tax and government regulations. An investment in the Fund involves a substantial degree of risk. The Fund is not suitable for all investors. The Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.
Shares are not individually redeemable. Investors buy and sell shares of the Sprott Silver Miners & Physical Silver ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 10,000 shares.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual Fund operating expenses, affect the Fund’s performance.
The Sprott Silver Miners & Physical Silver ETF seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the Nasdaq Sprott Silver Miners™ Index (NSLVR™). Nasdaq®, Nasdaq Sprott Silver Miners™ Index, and NSLVR™ are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Sprott Asset Management LP. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
Sprott Asset Management USA, Inc. is the Investment Adviser to the Sprott Silver Miners & Physical Silver ETF. ALPS Distributors, Inc. is the Distributor for the Sprott ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. ®Registered trademark of Sprott Inc. 2025.
