This year, as the price of silver has surged more than gold and Bitcoin, silver futures exchange-traded notes (ETNs) have reemerged. It has been about four years since their launch in 2021. Mirae Asset Securities announced it would list two types of leveraged and inverse silver ETNs to respond to the increase in investor demand.
According to the financial investment industry on the 2nd, Mirae Asset Securities plans to issue 'Mirae Asset Leveraged Silver Futures' and 'Mirae Asset Inverse 2X Silver Futures' ETNs, which track the price fluctuations of silver futures traded on the New York Mercantile Exchange (COMEX) at 2x and -2x. They are currently in the final review stage at the Korea Exchange and will be listed with a scale of 20 billion won each.
ETNs are products that track the price fluctuations of specific assets or asset indices, differing from exchange-traded funds (ETFs) issued based on the credit of securities firms. Unlike ETFs, they can form a base index with only a minimum of five stocks, and there is the advantage of not having to directly hold physical assets.
Mirae Asset Securities had released two products with the same name in September 2021, but they voluntarily delisted them in February last year. However, with the recent rise in silver prices attracting investor interest, it has decided to relaunch after a year and a half. Currently, there are a total of 17 silver futures ETNs in the market, including leveraged and inverse products. Of these, 11 were launched in 2021, while the others were released between 2015 and 2018.
A representative from Mirae Asset Securities said, "We assessed the fixed costs, ETN sales amounts, market conditions, and other factors, and carried out the delisting procedure last year, but recently judged that the attractiveness of silver prices has increased again and decided to relist."
The relaunch of the silver futures ETNs is largely influenced by the recent bullish trend in silver prices. According to the New York Mercantile Exchange (COMEX), silver futures prices have surged by 31% from the beginning of the year until the end of last month. This figure surpasses the gains of gold futures (28%) and Bitcoin (21%) during the same period. The price of silver rose to $39.5 on the 23rd of last month, setting a new 14-year high.
This year, silver gained attention as it was relatively undervalued compared to gold amid global economic uncertainties and increased demand for safe-haven assets due to U.S. tariffs. Additionally, the recent widespread use of silver in industrial goods such as electric vehicles and solar panels has also contributed to price increases.
Mirae Asset Securities explained that it set the issuance price of the two silver futures ETNs being launched at 20,000 won, which could also reduce transaction costs.
A representative from Mirae Asset Securities noted, "Some of the silver futures ETNs currently traded in the market are priced under 1,000 won, and the minimum bidding unit, or 'tick size' (1 won), constitutes a high proportion of the current price, resulting in relatively high transaction costs. We applied a 5 won tick size based on the price of 20,000 won to lower the price fluctuation range, which should benefit investors in terms of costs."
The silver futures ETNs that Mirae Asset Securities plans to launch this time are unlike most related ETNs currently traded in the market, which are mostly currency-hedged (products that minimize yield fluctuations due to exchange rate changes); they are currency-exposed. Investors can also gain profits from exchange rate gains due to the rising value of the dollar.
As of the 1st, the exchange rate of the won against the U.S. dollar (won/dollar) was 1,401.4 won, surpassing 1,400 won for the first time in two months. Kim Dae-jun, a researcher at Korea Investment & Securities, said, "Recently, favorable U.S. economic indicators have been announced, and the likelihood of the Federal Reserve (Fed) lowering interest rates has diminished, which may sustain the dollar's strength."