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<p>[QUOTE=&quot;NorthKorea, post: 1998176, member: 29643&quot;]ETF is an acronym for exchange traded (mutual) fund. In the case of commodity ETFs, the fund manager purchases a fixed basket (as defined by the fund prospectus). With precious metals ETFs, the fund holds a certain amount of ounces for each share held in the fund. They also charge an internal fee for keeping track of accounting and for storage/transaction fees. Sometimes, the fund manager will use futures to help with pricing of the commodity, but this can lead to problems during the week when options expire, since the fund will always sell at loss and buy at a premium. There are other complications, as well.</p><p><br /></p><p>To simplify things, we&#039;ll discuss the paper silver ETF. If you purchase shares in the ETF, you&#039;re really buying into a pooled account that controls millions of ounces of silver. If you own enough shares, you&#039;re given the option of taking physical delivery of your silver, at an additional expense. However, most people don&#039;t do this. The advantage to an ETF is that you can sell it immediately (assuming the stock market is open) without having to personally seek out a buyer. The disadvantage is that people who collect PMs occasionally don&#039;t &quot;trust the system&quot; and ETFs inherently require you to work within that system. <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie2" alt=";)" unselectable="on" unselectable="on" />[/QUOTE]</p><p><br /></p>

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