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Background:

I hold silver ETC that charges 0.49% TER. There are cheaper ETCs that haven't been around when I entered the market. I am trying to assess if it makes sense to roll over. Interestingly, the cheaper versions seem to perform worse (click on "YTD" and see) based on data from justetf.com. If that's true, there seems to be a hidden fee which needs to be taken into account for my decision.

Observations:

There are at least 4 physically backed silver ETCs available for European investors. Two of them share key specs (such as currency risk exposure, replication strategy, expense ratio, etc.).

If we assume that both ETCs are identically taxed for non-IE residents because metals don't pay dividends, those ETCs should therefore behave functionally identical - but in reality, they don't.

That's big. for every euro gained with the iShares Silver ETC this year, I missed out more than 10 cents compared to the alternative.

Questions:

  1. How to explain this difference in performance (why does AP not arbitrage)?
  2. Is this tracking error only? If tracking errors are due to fees, and both ETCs charge the same TER, is there a hidden fee X here on top of TER?
  3. How to calculate TER+X, which is the realized effective fee (I made up this term)?
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    Foir sure - hopefully someone has that answer!
    – Fattie
    Feb 11 at 10:09

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