By Jared Cummans

Silver investing, though often overshadowed by the prevalence of gold, is still among the most popular commodity allocations in todays markets. One of the most popular ways to gain access to this white metal is through exchange-traded products, as there are a number of funds that cracked the world of silver wide open. But because investors are presented with so many choices for silver investing, many are often left wondering which of these ETFs is the best.

The answer isnt quite as clear cut as a simple ticker. In reality, the answer is that it depends on your investment objectives and goals. Below, we outline several scenarios and which silver ETFs are the best for investors who fall under those categories.

The Trading Two

As far as active trading is concerned, there are two products that trump the rest of the space. The first place fund, by far, is the iShares Silver Trust (NYSEARCA:SLV ). This fund tracks physical silver, and just recently crossed the $10 billion mark as far as assets are concerned. Not only that, but the fund trades more than 10 million times each day (about 2 million more than GLD), and has a healthy options market for active investors.

But sometimes, trading plain silver is simply not enough, as those looking to make speculative bets want to leverage their exposure. Never fear — there is another silver instrument that is among the most traded commodity ETFs globally. The Ultra Silver Fund (NYSEARCA:AGQ ) represents a 2X leveraged play on the precious metal, and pulls in an average volume of over one million shares per day. The fund is extremely risky, but can be a very effective tool for those looking to make speculative bets on this precious metal.

What About Buy And Hold?

Here is where the debate gets a bit tricky. Similar to the gold ETF space. there are two competing, physically-backed funds that offer very different expense ratios. SLV is one of them, but it competes with the Physical Silver Shares (NYSEARCA:SIVR ), a physical fund that charges a full 20 basis points less than SLV. As far as liquidity is concerned, SIVR cannot compare with SLV. But when it comes to buying and holding two funds that offer identical exposure, SIVR gains the edge thanks to its cheaper expenses. It also maintains a strong liquidity.

Investors should also note that SIVRs slightly lower fees will allow it to outperform SLV over time by a slight margin. So thats it — SIVR wins the long-term scenario right? Not quite. Just like the gold ETF space, there is another fund that aims to be more tax efficient than its physical competitors.

The E-TRACS UBS Bloomberg CMCI Silver ETN (NYSEARCA:USV ) is an ETN that holds multiple silver futures at once in an effort to mitigate the negative impacts of contango. But this is not what makes the fund a more enticing choice. When it comes to tax treatment, USV dominates its physical competitors by charging just 15% for long-term capital gains. SLV and SIVR are both taxed as collectibles and will, therefore, charge 28% no matter how long you hold them.

Lets say you invested $10,000 in SLV, SIVR and USV exactly three years ago. Your positions would be worth as follows:

• SLV $17,602
• SIVR $17,695
• USV $17,080

SIVRs lesser expense ratio allows it to edge out in performance, but when you add in the tax expenses of these three year positions, the tables are turned.