Silver ETF vs. allocated vs. in-hand physical

Alloy

Alloy

Active Member
Hi all – How do you see the pros and cons of buying silver ETFs, allocated silver, and in-hand bullion?

Silver ETFs expose you to the price of silver in a very straightforward way, just like gold ETFs do for gold. They're kind of like having a currency backed by silver. I think they're pretty slick. iShares Silver Trust (SLV) is the largest. Here's a list of the top eight silver ETFs.

When I think of allocated/vaulted silver, I mostly think of BullionVault. They've touted lower fees than ETFs, but I've never done a comparison. Their commission is 0.50% per transaction, and they charge 0.48% per year for silver storage (gold is 0.12%). Is this cheaper than the costs of ETFs?

One advantage I see right now for both ETFs and BullionVault is that they don't have the dealer markups, which are huge today. You're paying damn near spot price. Right now BullionVault silver is $12.22 while spot is $12.10 – impressive.

What do you think is the best way to get into silver right now while prices are low? Is there any advantage to taking delivery of silver bullion? It seems like a huge hassle compared to paper or allocated, and I don't like having lots of valuables in my home – too easy to lose to criminals.
 
I'm considering SLV. Unallocated is out for me because of the risk.

Anyone knows if SLV has the same issues as GLD?
 
Alloy said:
Is that like an ETF?
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Yes, sometimes referred to as paper silver, as you can't really touch it. Many bullion dealers and the Perth Mint have this option for buying gold and silver.

For the Perth Mint it means they can use your metal in their refinery and they don't have to pay to lease metal from somewhere else. So this saves them a bit of cost and at the same time it helps the investor as there's no annual storage fees for unallocated, and they make their fees on their buy and sell price.
 
SilverDJ said:
No, it's this:
https://www.perthmint.com/storage/depository-online.html
https://www.perthmint.com/storage/help/faq-storage-options.html
Many dealers also have their own unallocated programs, but we have seen instances of them going bust and people losing their unallocated metal.
Perth Mint is the only program in the world that is government guaranteed, and that included unallocated.
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Hey, do you have any examples of this happening that I can look into? Did this happen to Perth Bullion as well?
 
fishduck said:
Hey, do you have any examples of this happening that I can look into? Did this happen to Perth Bullion as well?
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http://www.bullionbaron.com/2014/07/how-safe-are-unallocated-bullion.html

Not sure about Perth Bullion:
http://about.ag/PerthBullion.htm

Bottom line is you become an unsecured creditor of the company in the event of an insolvency or bankruptcy. That means every else gets first shot at any money, metal or assets left over (if any) before unallocated account customers get anything back.
With allocated you legally own the metal bar and it cannot be touched by creditors or liquidators. If they do touch it, that's theft of your property and they can go to jail.
Of course, even with allocated, the business owner could steal your bars and run off with them (or never had them to begin with), and this is why independent auditing is important.

As for the security of in-hand. You are statistically more likely to have your metal stolen by storing it yourself.
 
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SilverDJ said:
No, it's this:
https://www.perthmint.com/storage/depository-online.html
https://www.perthmint.com/storage/help/faq-storage-options.html
Many dealers also have their own unallocated programs, but we have seen instances of them going bust and people losing their unallocated metal.
Perth Mint is the only program in the world that is government guaranteed, and that included unallocated.
Click to expand...
To note on the PM program, yes it's government guaranteed because the PM is government owned. Therefore however, in any kind of currency crisis these are the first stocks of silver and gold that will be in grabs of the government. And they won't tell you in advance lest you got time to get your unallocated barred and run to Hay St to pick up...
 
Jonasdundee said:
To note on the PM program, yes it's government guaranteed because the PM is government owned. Therefore however, in any kind of currency crisis these are the first stocks of silver and gold that will be in grabs of the government. And they won't tell you in advance lest you got time to get your unallocated barred and run to Hay St to pick up...
Click to expand...

The gold and silver in accounts at the perth mint is a drop in the bucket of the money available to them. No point in ever touching it.
If you are worried about unallocated, then switch to allocated, then it's much harder for the government to touch it because they don't own it.
Also, if if the government "took" the physical gold and silver, it doesn't vanish from your account, you'd still be able to sell your "virtual" metal.
 
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