Yes, the iShares Silver Trust (SLV) is backed by physical silver bullion. As of February 2026, the trust held approximately 517.5 million troy ounces of silver on behalf of shareholders, stored in vaults by a custodian.1BlackRock iShares. iShares Silver Trust (SLV) Each share represents a fractional ownership interest in that metal rather than a derivative contract or a promise to deliver silver later, because SLV is structured as a grantor trust.2iShares. 2025 Grantor Trust Tax Reporting Statement What that backing actually means for you depends on custody, insurance, fees, and taxes, and a few of those details are narrower than most investors assume.
What the Silver Behind Your Shares Looks Like
The trust holds bullion that meets London Good Delivery standards. Bars have a minimum fineness of 999.0 parts per thousand and a target weight of 1,000 troy ounces, with a tolerance of plus or minus 10 percent. Older bars produced before 2025, in a wider range of 750 to 1,100 ounces, are still accepted but are being phased out over time.3LBMA. Good Delivery Technical Specifications Every bar must carry the stamp of a refiner on the LBMA-approved list.4iShares. iShares Silver Trust Prospectus
The trust publishes a daily bar list on its website identifying every silver bar in the vault. Each entry shows the bar number, gross weight, fineness, fine weight, and refiner mark. Anyone can download that list and cross-check the inventory against the trust’s stated holdings. The Bank of New York Mellon acts as trustee, handling day-to-day administration, processing creation and redemption orders, coordinating deliveries with the custodian, and publishing the net asset value.4iShares. iShares Silver Trust Prospectus
Where the Silver Is Stored and Who Holds It
JPMorgan Chase Bank N.A., through its London branch, is the primary custodian responsible for safekeeping the trust’s silver. The metal sits in vaults in both London and New York, and the custodian agreement allows for additional locations if the sponsor and trustee approve them.4iShares. iShares Silver Trust Prospectus
When primary vaults reach capacity, the custodian may use sub-custodians, typically large bullion banks, to hold portions of the silver in additional secure locations. The custodian remains responsible for the metal stored with those sub-custodians.4iShares. iShares Silver Trust Prospectus
Allocated Versus Unallocated Silver
The vast majority of the trust’s silver is held in allocated form, meaning specific, individually identified bars are assigned to the trust. The custody arrangement, however, permits up to 1,100 ounces to be held in unallocated form at the end of each business day.5SEC.gov. iShares Silver Trust – Form S-1 Registration Statement Unallocated silver is a claim against the custodian’s general inventory rather than ownership of specific bars. At 1,100 ounces against more than 517 million, the gap is tiny, but the trust is not 100 percent allocated at every moment.
The Fee Slowly Reduces Silver Per Share
The trust charges a sponsor fee of 0.50 percent per year. Because it has no revenue other than the silver itself, it pays that fee and any other expenses by selling small amounts of bullion. As a result, the amount of silver represented by each share gradually decreases over time.1BlackRock iShares. iShares Silver Trust (SLV) The erosion is modest in any single year, but it compounds. Over a decade, the silver behind each share will have measurably declined even if the spot price of silver stays flat.
What the Custodian Is Actually Liable For
The custodian’s legal obligation is narrower than many investors expect. Under the custody agreement, the custodian is only responsible for losses that result from its own negligence, fraud, or willful failure to perform its duties. If it is found liable, damages are capped at the value of the lost silver at the time of the failure.5SEC.gov. iShares Silver Trust – Form S-1 Registration Statement
The custodian is not liable for losses caused by events beyond its control, including natural disasters, terrorism, riots, armed conflict, and strikes. The custodian does maintain insurance covering loss of silver, but that insurance is for the custodian’s own benefit. The trust and its shareholders cannot file claims under it, and the custodian can reduce or cancel the coverage with 30 days’ notice to the trustee.5SEC.gov. iShares Silver Trust – Form S-1 Registration Statement
The prospectus describes the trust’s activities as limited to issuing shares in exchange for silver deposits, selling silver to cover expenses, and delivering silver for redemptions. The custodian can only release silver from the trust’s account when instructed in writing by the trustee.4iShares. iShares Silver Trust Prospectus While the prospectus does not contain a blanket prohibition on leasing, the limits on the trust’s activities and on the custodian’s release authority effectively keep the silver from being lent out for profit.
How the Holdings Are Verified
Bureau Veritas, an independent inspection firm, conducts physical audits of the silver bars in the custodian’s vaults on behalf of the trust.6iShares. Bureau Veritas Inspection Report The inspections confirm that the weight, fineness, refiner marks, and bar numbers on the physical bars match the trust’s records, and the reports are posted publicly by the sponsor.
The daily bar list adds a second layer of transparency. Any investor or analyst can compare the total weight of the listed bars against the trust’s reported net asset value. Together, the third-party inspections and the bar list create a verification system that is more open than most commodity storage arrangements, though it still depends on the accuracy and access of the inspecting firm.
Can You Redeem Shares for Physical Silver?
Not as an individual investor. Only Authorized Participants, large broker-dealers that have signed formal agreements with the sponsor and trustee, can exchange SLV shares for physical silver. Redemptions happen in blocks of 50,000 shares called Baskets.4iShares. iShares Silver Trust Prospectus That mechanism lets those institutions arbitrage price differences between SLV shares and the spot silver market, which keeps the share price closely aligned with the value of the underlying metal.
Retail investors cannot request physical delivery, no matter how many shares they hold. Individual shares are not redeemable by the trust and trade on NYSE Arca like any other exchange-listed security.4iShares. iShares Silver Trust Prospectus If you want to exit, you sell your shares through your brokerage account. The silver stands behind the value of those shares, but SLV is not a route to personal bullion delivery.
How the Physical Backing Affects Your Taxes
Because SLV is a grantor trust, the IRS treats you as if you directly own a proportional share of the silver rather than shares in a fund.2iShares. 2025 Grantor Trust Tax Reporting Statement Silver is considered a collectible, so long-term capital gains are taxed at a maximum federal rate of 28 percent rather than the 15 or 20 percent rate that applies to most stocks and ETFs.7Office of the Law Revision Counsel. 26 U.S. Code 1 – Tax Imposed
If your modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married couples filing jointly, you may also owe the 3.8 percent net investment income tax on top of the collectibles rate, for a potential combined federal rate of 31.8 percent.8IRS. Questions and Answers on the Net Investment Income Tax Short-term gains, on shares held one year or less, are taxed at ordinary income rates.
The small silver sales the trust makes each year to cover the sponsor fee also generate taxable events for shareholders. The trust issues an annual grantor trust tax reporting statement with the figures you need to calculate your share of those gains or losses.