Most of the superstars from the ETF world in 2010 were found in the Silver ETF category. Most of the unleveraged ETFs were up about 65% and the Leveraged Silver ETF was up more than twice that much. 2010 also marked the debut of the Silver Mining ETF – SIL which had a spectacular first year slightly outperforming the metal itself.

The most heavily traded Silver ETF is the original SLV iShares Silver Trust which began trading in April of 2006. With over $10 Billion in assets and recently trading over 25 million shares per day it has become one of the giants in the ETF industry. This is despite the fact that many “Purists” still disregard the ownership of Silver ETFs in favor of the actual bullion. They also don’t like the fact that the custodian is JP Morgan who has been linked with alleged silver market manipulation (via comex silver futures) in the recent past. This disdain seems to have done little to dampen investor enthusiasm. In reality, most investors don’t care to take delivery of silver bars and store them.

The second most popular Silver ETF is the Physical Silver Shares Trust (SIVR) from ETF Securities LTD. ETFS was the first to initiate a more rigid tracking system by publishing the serial numbers from each bar of silver on their web site. The actual silver is also stored in London and the custodian is HSBC (who reportedly has also had big short positions in Comex silver futures). Despite the additional attention focused on transparency and a 20 basis point discount in the annual expense ratio SIVR remains a much smaller silver ETF compared to SLV. SIVR however is still very liquid trading about 500,000 shares on an average day. The one thing I do like about SIVR is that the price has been more closely related to that of the front month silver futures so it’s a more accurate indicator of where the market actually is trading. The performance of the two ETFs has been nearly identical during the time both have been in existence.

There is a 3rd unleveraged Silver ETF which is the PowerShares DB Silver Fund (DBS). This fund has been around almost as long as SLV launching in January 2007. It’s reliance on Silver Futures instead of storing actual bullion has lead to a slight under performance over time which probably explains why it’s popularity has lagged as well. While SLV has exploded in popularity DBS still only has an average trading volume of less than 70,000 shares per day.

Based on my analysis you can’t really go wrong with any of the 3 but SLV is definitely the most liquid and SIVR probably has a bit more transparency. It’s really a personal preference as to which of those characteristics is most important to you.