Sprott Physical Silver Trust was down 5.4% in premarket trading Thursday.
Sprott Physical Silver Trust fell harder than silver prices because its premium to net asset value narrowed after the follow-on announcement late Wednesday.
Although it trades on NYSE Arca like most ETFs, the Sprott silver product has some unique wrinkles.
First, it’s structured as a closed-end fund, so it can see premiums and discounts to indicative value based on demand for the shares.
PSLV traded at a premium of 7.2% on Wednesday, according to Morningstar. However, that premium was set to narrow Thursday as the follow-on offering will increase the number of shares outstanding.
The silver trust is managed by Toronto-based Sprott Asset Management.
The silver fund is unique because large shareholders are able to redeem shares on a monthly basis in exchange for silver bullion.
PSLV is also listed on the Toronto Stock Exchange.