If you want silver exposure without buying physical bullion, the Sprott Physical Silver Trust (PSLV -1.47%) is one alternative to avoid dealer spreads and storage headaches. It's one of the most popular ways to hold silver inside a brokerage account, but it's crucial to understand that this product is not a silver exchange-traded fund (ETF).
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Key Data Points
It's technically a silver closed-end fund (CEF), and that structural difference matters, especially for beginner investors. In this guide, we'll break down how the trust works, what it holds, the quirks that come with the CEF structure, and whether it makes sense for your portfolio.
Exchange-Traded Fund (ETF)
What is the Sprott Physical Silver Trust
The Sprott Physical Silver Trust is a closed-end fund launched in October 2010. Unlike a typical silver ETF, which continually creates and redeems shares to keep its price aligned with net asset value (NAV), a CEF issues a fixed number of units. The price then fluctuates based on market buying and selling pressure.
Because of that, the trust often trades at a premium or discount to NAV. As of Nov. 13, it traded at roughly a 4.06% discount, meaning the units changed hands for slightly less than the underlying silver was worth. These discounts can persist for long periods, creating timing challenges for investors.
Traditional ETFs don't have this issue because authorized participants can add or remove shares "in kind" using silver bars, keeping prices tightly in line with NAV. Even with these structural drawbacks, the trust remains popular with investors who want pure physical exposure. It is one of the largest silver-focused CEFs, managing $10.72 billion in assets.
How to buy the Sprott Physical Silver Trust
- Step 1: Open your brokerage account: Log in to your brokerage account where you handle your investments.
- Step 2: Search for the ETF: Enter the ticker or ETF name into the search bar to bring up the ETF's trading page.
- Step 3: Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
- Step 4: Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Step 5: Submit your order: Confirm the details and submit your buy order.
- Step 6: Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Holdings of the Sprott Physical Silver Trust
As of mid-November, the trust held 204,505,014 ounces of physical silver, backed by 595,880,890 units outstanding. Each unit, therefore, represents roughly 0.343 ounces of silver.
All holdings are unencumbered, fully allocated London Good Delivery (LGD) silver bars, the standard accepted in global wholesale precious metals markets. "Fully allocated" means specific bars are held in the trust's name, not pooled with other clients' holdings.
The bullion is stored at the Royal Canadian Mint and is independently audited by KPMG, an independent external auditor. This trust does not trade silver futures or hold silver stocks.
Should I invest in the Sprott Physical Silver Trust
The trust delivers direct, audited physical silver exposure without the hassles of storing bullion yourself. But it comes with meaningful trade-offs.
The ongoing premium and discount to NAV introduce extra volatility and uncertainty. There’s no guarantee that a discount will close quickly, and premiums can make entries more expensive than expected. Its fees are also substantially higher than the best ETFs for silver exposure, many of which offer cheaper exposure without the NAV pricing issue.
Before deciding, also consider why you want silver exposure. Silver has industrial demand drivers -- solar panels, electric vehicle (EV) components, and electronics -- and can benefit from monetary metal sentiment alongside gold. Some investors also monitor the silver-to-gold ratio as a guide for attractive entry points.
If physical backing and long-term brand recognition matter to you, the trust is serviceable. However, it isn't the most cost-effective or straightforward option in 2025.
Does the Sprott Physical Silver Trust pay a dividend
No. Silver does not generate cash flow, so the trust does not distribute dividends.
What is the Sprott Physical Silver Trust's expense ratio
The fund charges an expense ratio of 0.57%, or $57 annually for every $10,000 invested. This fee is deducted from assets, lowering NAV over time.
Expense Ratio
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Historical performance of the Sprott Physical Silver Trust
Metric | 1 year | 3 year | 5 year | 10 year |
|---|---|---|---|---|
Net asset value | 47.36% | 35.13% | 14.26% | 10.84% |
Market price | 45.40% | 34.04% | 14.02% | 10.36% |
The bottom line on the Sprott Physical Silver Trust
This trust provides direct exposure to physical silver, with reputable custody and auditing, but the CEF structure introduces pricing quirks and higher fees than its ETF competitors. It remains a popular option, but investors seeking clean, low-cost silver exposure may find better alternatives elsewhere.
