By Erin E. Arvedlund
In the midst of the market uncertainty over Brexit, it's not just gold that's shining as an investment alternative these days. Silver is outperforming, as well.
As gold has surged to its highest since March 2014 in recent weeks, silver is hovering around $19 an ounce, up roughly 10 percent since voters in Britain opted to leave the European Union.
After hitting nearly $40 an ounce in 2011 and then crashing down to $11, silver recently broke above its January 2015 highs, a key price level.
"Silver is still cheap compared to gold, and I would still expect it to outperform gold in the near term," said Fran DeAngelis, a Boston-based expert in precious metals ETFs.
Retail investors can buy funds that invest in bullion or in mining stocks, generally exchange-traded funds and exchange-traded notes (the latter are technically securities backed by banks, which implies more risk).
Some precious-metals ETFs and ETNs aren't very liquid, and the underlying trading and management fees can be pricey, so research them carefully with a broker or financial adviser.
That said, here are some options if you want some exposure to precious metals (we're lumping gold and silver together).
The obvious choice for many investors has been SPDR Gold Shares (GLD), a $42 billion fund that tracks the performance of the price of gold bullion, minus the fund's expenses, and the iShares Gold Trust (IAU), which is similar but somewhat smaller. The iShares Silver Trust (SLV) has the same structure but for silver.
An additional two ETFs invest in gold-mining shares: VanEck's Vectors Gold Miners (GDX) holds large-capitalization companies, while GDXJ represents "junior" or smaller gold-mining companies. Global X Silver Miners (SIL) invests in silver miners, tracking the Solactive Global Silver Miners Total Return Index.
The iShares MSCI Global Gold Miners ETF (RING) tracks the MSCI ACWI Select Gold Miners Investable Market Index and holds major mining company shares such as Barrick Gold Corp. (ABX), Newmont Mining Corp. (NEM), and Goldcorp Inc. (GG).
Caveat: There are meaningful tax considerations.
"If you buy GLD or IAU or SLV, when you sell the capital gains are treated as if you bought and sold a commodity," DeAngelis explained. That tax rate is higher than the rate for capital gains in stocks.
So again, check with your financial adviser before purchase.
ETNs, on the other hand, are treated as stock for tax purposes, so the tax rate may be lower than for some ETFs, he added.