Silver Miners Commodity

Silver mining ETFs and mutual funds invest the majority of their assets... Silver mining ETFs and mutual funds invest the majority of their assets in the shares of companies that mine and explore for silver. They also invest in silver royalty companies, which own streams of income related to existing or planned silver mines. These funds can be actively or passively managed, and may invest across different jurisdictions, depending on their mandate. Companies that mine or explore for silver come in three different sizes: Junior, mid-tier, and senior (otherwise known as large-cap). Junior silver mining companies are the riskiest of the bunch, as they often do not have a mine yet. These companies are usually still looking for silver, and so their stock price will fluctuate based on the drill results they produce. Some junior companies will have started production, though, and their share price will be affected by their ability to generate new economic reserves for their mine. Investors are attracted to silver mining stocks due to their leverage to the silver price. If silver goes up by say 10%, the operating margins of a silver mining company can increase by significantly more. This makes an investment in silver equities more attractive for someone bullish on silver than the metal itself. Silver mining ETFs and mutual funds are not without significant risks and are only appropriate for those with a large risk appetite. The biggest risk is the silver price itself, as the price of silver and silver equities tend to be quite correlated. Other risks include those of a geopolitical nature (the possibility that a government might nationalize a mine), as well as higher energy costs, as those form a large part of a mine’s operating budget. Last Updated: 04/23/2024 View more View less

Silver mining ETFs and mutual funds invest the majority of their assets in the shares of companies that mine and explore for silver. They also invest in silver royalty companies, which own streams... Silver mining ETFs and mutual funds invest the majority of their assets in the shares of companies that mine and explore for silver. They also invest in silver royalty companies, which own streams of income related to existing or planned silver mines. These funds can be actively or passively managed, and may invest across different jurisdictions, depending on their mandate. Companies that mine or explore for silver come in three different sizes: Junior, mid-tier, and senior (otherwise known as large-cap). Junior silver mining companies are the riskiest of the bunch, as they often do not have a mine yet. These companies are usually still looking for silver, and so their stock price will fluctuate based on the drill results they produce. Some junior companies will have started production, though, and their share price will be affected by their ability to generate new economic reserves for their mine. Investors are attracted to silver mining stocks due to their leverage to the silver price. If silver goes up by say 10%, the operating margins of a silver mining company can increase by significantly more. This makes an investment in silver equities more attractive for someone bullish on silver than the metal itself. Silver mining ETFs and mutual funds are not without significant risks and are only appropriate for those with a large risk appetite. The biggest risk is the silver price itself, as the price of silver and silver equities tend to be quite correlated. Other risks include those of a geopolitical nature (the possibility that a government might nationalize a mine), as well as higher energy costs, as those form a large part of a mine’s operating budget. Last Updated: 04/23/2024 View more View less