Double Silver ETF

 
One interesting development in Silver ETF products has been the introduction of leverage. When considering leveraged products you must realize that you are now moving from a pure "Silver Storage" vehicle into products that often utilize financial derivatives such as Futures, Options, Forward Contracts, Swaps etc. Some of these derivatives experience time decay, contango and other factors that affect performance. Also, when applying leverage timing is more crucial as you will see in the charts below. Make sure you fully understand these products before investing.

2x Leveraged Silver ETF (Long)

AGQ- PowerShares Ultra Silver ETF is the only 2x leveraged silver etf currently available. It uses forward contracts and silver futures to attempt to correspond to 200% of the daily performance of Silver bullion as measured by the US $ pm London Fix price.

The chart below looks exceptionally good based on the fact that the debut of AGQ coincides with a low in Silver prices (12/01/08) so there has not been a major down draft in metals prices since inception. Timing is everything when investing in Leveraged ETF products, but since AGQ began trading right after the 2008 low it has been a specatular winner.

AGQ was the top performing ETF in 2010 due to the sharp rally in silver prices during the last 4 months of the year.  As you can see by the chart below this lead to it peaking at a 1600% return since inception which is quite astounding for a fund that is only 3 years old.

The primary purpose of the Leveraged ETF is to allow investors to carry leverage in cash accounts that normally do not allow the use of margin.

AGQ has an annual expense ratio of .95% (95 basis points) and is the second most liquid "long" Silver ETF behind the leader SLV.  Obviously these leveraged Silver ETFs are favorites among traders, that's why they have a tremendous amount of trading volume.

AGQ VS. SLV Since Inception

Weekly chart begins on AGQ inception date 12/01/08.

Visit our blog for all the current updates for the Double Silver ETF 

SLV  |  SIVR  |  DBS  |  USV  |  AGQ  |  ZSL  |  SIL