This is a physically backed product that directly reflects the current value of silver bullion stored in vaults in London and Zurich. It tracks the silver spot price rather than an index, and because it does not roll futures contracts, it is free of the roll costs that come with contract expiry.

It suits investors who want direct exposure to silver itself as an inflation hedge or for diversification, and who want to avoid the operational risks of mining companies.

It is a passively managed ETF operated by Aberdeen.

The trust deposits physical silver bullion in the vaults of its custodian and issues shares representing an interest in those holdings. Because it uses no derivatives or futures contracts, there is no loss from contract rollovers. The silver held per share gradually declines over time by the amount of the fee.

• Holds physical metal instead of futures, so there are no roll costs
• Fee burden is on the low side among products offering the same physical silver exposure
• The custodian regularly publishes the bullion list

Assets under management (AUM) stand at $3.8B, and the total expense ratio is 0.30% per year.

If the goal of physical silver exposure is the same, the choice ultimately narrows down to fees and trading liquidity. Trading volume is higher for products such as SLV, while this ETF has the advantage on fees.

Silver prices are driven by both safe-haven demand and industrial demand, so they tend to swing more widely than gold. They react sensitively to the direction of real interest rates and the movement of the dollar, and ups and downs can diverge sharply even over short periods. It is an asset whose direction is hard to pin down in either way.

Money has repeatedly flowed into precious metals products when expectations of rate cuts rise or inflation pressure comes into focus. Industrial demand from items such as solar panels and electronic components is also one pillar of silver supply and demand, so the strength of inflows varies with economic indicators.

Its strengths are the physical holding structure and a low fee burden, while the lack of distributions and silver's characteristically high volatility are drawbacks.

The SLV ETF shown in the table offers the same physical silver exposure with a larger trading volume, while this ETF has the edge on fees, so the gap widens the longer you hold. Gold-based products such as GLD, IAU, GLDM and IAUM are difficult to group in the same category because the metal is different, but they are useful as benchmarks for comparing fees and fund size. Other products worth considering include PSLV, which has a different physical redemption structure, AGQ, which offers leveraged exposure, ZSL, which takes the opposite direction, and SIL and SLVP, which invest in silver mining companies.

Here are the items to check before investing in this ETF. Given the nature of physical silver exposure, reviewing costs, distributions, volatility and tax treatment in advance makes the decision easier.

If the silver price itself falls, the loss is reflected in full. When slowing industrial demand, rising real interest rates and a stronger dollar coincide, declines can deepen. With no distributions, there is also no cash flow to collect while waiting out a downturn.

It is a suitable choice for investors who want exposure to physical silver at low cost. If trading volume and options availability come first, consider SLV or similar products. If cost efficiency comes first, consider this ETF. Keep the position size as a supporting pillar of your asset allocation.