Why Silver ETFs Can Be Better Investments than Silver Bars

2026-01-09 10:00:00 ET

Silver prices are flying. Before you head down to a precious metals dealer and place an order, it is worth slowing down and asking a few questions: Are you buying because of fear of missing out? Do you understand the structural and macroeconomic reasons behind the recent move in silver prices? Do you know whether today’s price is attractive relative to future growth or long-term valuations?

If the answer to those questions is no, more research is probably needed. This is not about dissuading you from investing in silver. It is about avoiding poorly timed decisions. That said, if you are set on owning silver, there is another question worth asking: Do you know how inefficient buying physical silver can be?

I say this as someone who owns a few silver coins. They are satisfying to hold, but they have also been far more trouble than expected. If your goal is simply exposure to the price of silver, an exchange-traded fund (ETF) may be a better option. Here is why.

The argument against silver bars

When you buy physical silver, you usually buy it by the ounce. One-ounce coins are the most common, followed by 10-ounce bars. Larger formats like 100-ounce bars or one-kilogram bars exist, but the same issue applies across the board.

The key problem is the spread. The spread is the difference between what a dealer sells silver for and what they are willing to buy it back for. That cost is paid by you the moment you transact.

As an example, consider VBCE, the largest bullion dealer in Vancouver. As of January 7, 2026, at 1:53 PM PST, VBCE was offering to buy one-ounce Silver Maple Leafs for $106.30 and selling them for $115.30. That roughly $9 difference is the spread. If you bought a coin and sold it back immediately, you would lock in a loss right away.

Then there are the practical issues. Once you own the silver, you need to store it. That usually means a safe at home and a conversation with your insurance provider. A safety deposit box defeats the purpose for many people.

If you want to sell to rebalance your portfolio and buy stocks when they are down, you need to physically go back to the dealer and accept the spread again. This friction works against the whole idea of diversification.

A silver ETF instead

If your goal is price exposure rather than possession, silver ETFs solve most of these problems. They can be held inside registered accounts such as a Tax-Free Savings Account, a Registered Retirement Savings Plan, or a First Home Savings Account.

One option is iShares Silver Bullion ETF ( TSX: SVR ). For a 0.66% expense ratio, it provides Canadian dollar exposure to the spot price of silver, net of fees. The ETF has been around since July 2009 and currently holds about $483 million in assets.

The physical silver backing the fund is stored in a secure vault and is audited periodically. From an investor’s perspective, it trades like a stock. At last check, the bid was $33.80, and the ask was $33.96, a spread of $0.16. That is far tighter than what most retail investors face when buying physical silver.

The post Why Silver ETFs Can Be Better Investments than Silver Bars appeared first on The Motley Fool Canada .

Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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