Gold prices approach a new high of $65. How to choose non-dividend ETFs without falling into pitfalls?

The white silver market in 2025 is experiencing a historic surge. The London spot silver price broke through the psychological level of $60 per ounce on December 9, followed by a record high of $64.6/oz. Since the beginning of the year, the increase has exceeded 100%, far outperforming gold by over 60% and significantly surpassing the Nasdaq Composite Index’s approximately 20% gain.

Multiple factors are driving this rally: the Fed’s easing expectations, ongoing tight global silver supply, and the US officially listing silver as a critical mineral. International investment bank UBS has raised its target price for silver in 2026 to the $58–$60 range, with the possibility of further climbing to $65/oz.

In response to this investment opportunity, many retail investors are turning to silver ETFs as a way to participate. However, the market offers a wide variety of silver ETFs, especially non-dividend-paying ones, raising questions about their fees, tracking accuracy, and whether they truly follow silver prices—confusing many newcomers.

Why Are Most Silver ETFs Non-Dividend Paying?

The reason most silver ETFs do not pay dividends stems from the nature of their underlying assets. Silver, as a commodity, does not generate cash flow unlike stocks or bonds. Whether holding physical silver or silver futures contracts, the ETF’s returns come solely from capital gains as silver prices rise, not from dividend or interest distributions.

This characteristic has pros and cons for investors. The advantage is avoiding the complexity of dividend tax withholding—especially relevant for overseas investors, as the US typically withholds 30% on dividends—non-dividend ETFs avoid this issue. The downside is that returns depend entirely on silver price movements, with no steady cash flow through dividends.

Understanding this, let’s explore how silver ETFs actually operate.

How Do Silver ETFs Work?

The core goal of silver ETFs is to replicate the performance of the silver market. To achieve this, they mainly adopt two strategies: directly holding physical silver bars or using derivatives such as silver futures contracts linked to silver prices.

Regardless of the approach, the net asset value (NAV) of the ETF will fluctuate in tandem with the London spot silver price. If silver rises by 5%, the ETF’s value theoretically also increases by about 5%; the same applies in reverse. However, due to management fees and tracking errors, actual returns are often slightly lower than the silver price movement.

This leads to a key question: How to choose the most suitable silver ETF among many options?

A Comparison of the 7 Mainstream Silver ETFs

Physical vs. Futures, each has its pros and cons

SLV is the largest and most recognized silver ETF worldwide, managed by BlackRock, with assets exceeding $30 billion. Launched in 2006, it adopts a passive management approach, directly holding physical silver, with JPMorgan Chase as custodian. Its physical holdings strategy results in high tracking accuracy, with an annual fee of 0.50%, which is reasonable in the industry.

PSLV is another large-scale option, with about $12 billion in assets. However, PSLV is a closed-end fund with a fixed number of units, and its market price is determined by supply and demand, often leading to premiums or discounts, adding trading complexity.

DBS and AGQ follow a futures-based approach. The former offers 1x tracking, while the latter provides 2x leverage. Leveraged ETFs like AGQ are designed for short-term trading; due to compounding effects and rollover costs, long-term holding can lead to tracking errors and is not suitable for buy-and-hold investors.

ZSL is an advanced product offering 2x inverse leverage, designed for bearish views on silver or hedging, generally not recommended for long-term holding by retail investors.

Mining-focused ETFs carry higher risks

SLVP represents an alternative investment approach—investing in global silver mining companies rather than physical silver. In 2025, SLVP gained about 142%, surpassing the 103% increase of direct silver prices, demonstrating the leverage effect of mining stocks. However, SLVP’s volatility is higher, with wider bid-ask spreads and tracking errors, making it unsuitable for risk-averse investors.

Local options in Taiwan

Quota Yuan Avenue JPY Silver (00738U) was established in 2018, investing in COMEX silver futures contracts, with a fee rate of 1%. As a Taiwan-listed ETF, it offers the most convenient way to buy—directly tradable through Taiwanese brokers without needing overseas accounts or proxy trading. However, the 1% fee is relatively high, and the high volatility risk level requires careful consideration.

Tax Advantages and Disadvantages of Non-Dividend ETFs

When purchasing Taiwan-listed silver ETFs (like 00738U), the tax treatment is straightforward—no tax on purchase, 0.1% transaction tax on sale.

For overseas silver ETFs (like SLV, PSLV), the situation is more complex. Taiwanese investors consider these as foreign property transactions, included in basic income calculations. The threshold is set at annual foreign income ≤ NT$1 million tax-free; amounts exceeding this are taxed at 20%.

Non-dividend ETFs have an advantage over dividend-paying products by avoiding the 30% US withholding tax on dividends, but the trade-off is that returns depend entirely on silver price performance, with no passive income stream.

How to Buy Silver ETFs? Custodian vs. Overseas Brokers

Custodian: safest but most expensive

Using domestic brokers (Fubon, Cathay, Yuanta, Mega, etc.) for custodian trading is the main approach for Taiwanese investors. Advantages include regulation by the Financial Supervisory Commission, tax handling by the broker, and funds staying within Taiwan. Disadvantages are higher fees and limited product choices.

Opening an account is simple: online or in-branch application, with ID and bank account. Many brokers support regular savings plans, suitable for dollar-cost averaging.

Overseas brokers: lower costs but self-managed taxes

Opening accounts directly with overseas brokers (like Interactive Brokers) reduces intermediary fees, with very low or zero commissions, and faster trading. The downside is that most platforms have English interfaces, require remittance and currency exchange, and investors must handle tax reporting themselves.

Additionally, transferring funds abroad involves security risks and legal issues related to estate planning, making it less convenient than custodian trading.

Risks and Returns of Silver ETF vs. Other Investment Methods

Physical silver bars provide a tangible sense of security but involve storage costs (annual fee 1-5%), theft risk, low liquidity, and buy-sell premiums (5-6%), resulting in net returns of about 95–100%, significantly below the nominal 103% silver price increase.

Silver futures can leverage returns—2x leverage theoretically yields over 200%—but also amplifies losses, requires continuous monitoring of expiry dates, rollover operations, and involves higher complexity. Futures contracts also carry non-performance risk, with higher transaction costs and margin requirements.

Silver CFDs sit between ETFs and futures—trading convenience similar to ETFs but with leverage akin to futures, sharing leverage risks and unsuitable for low-risk investors.

Compared to these, non-dividend ETFs offer advantages such as easy trading, high liquidity, no storage or insurance costs, relatively manageable risks, and suitability for beginners and small investors seeking quick entry and exit. Although their yield (~100–103%) is lower than futures or mining stocks, their risk-reward profile is more balanced.

Common Risks in Silver ETF Investment

Silver prices are far more volatile than gold or stocks. The 2025 surge over 100% is impressive, but historically, silver has experienced sharp corrections, with short-term losses potentially severe. This means silver ETFs are suitable mainly for investors with higher risk tolerance.

Tracking errors are unavoidable. Futures-based ETFs are affected by rollover costs, often resulting in returns below spot prices over the long term; physical ETFs are more accurate but incur annual fees of 0.4–0.5%, which erode returns over time.

Overseas ETFs involve exchange rate risks and complex tax considerations. Silver prices are influenced not only by supply and demand but also geopolitical factors, industrial demand (solar, electronics), and global monetary policies.

Non-dividend paying does not mean no point. Investors must understand that the total return of non-dividend ETFs depends solely on silver price movements; they do not generate passive income, which may not meet the needs of income-focused investors.

Conclusion

Silver ETFs hold a unique position in asset allocation. They eliminate the storage hassle of physical silver through securitization, offering high liquidity and trading convenience, suitable for those wanting exposure to silver without physical management costs.

Particularly, non-dividend ETFs avoid complex dividend tax issues, making investment logic more straightforward—if silver prices go up, you profit; if they fall, you lose. This transparency can be advantageous for beginners.

However, investors must recognize that silver prices are highly volatile, driven by industrial demand and market sentiment. Differences among ETFs in fees, tracking methods, and leverage use are significant. A diversified approach, avoiding over-concentration in a single product, and regular review of market conditions and positions are recommended for prudent participation.