UBS AG ETRACS Monthly Pay 2xLeveraged Silver Shares Covered Call Exchange Traded Note (SLVO)
NASDAQ (NMS) NASDAQ (NMS) Primary 
SLVO: Watching Silver Seasonality For Potential Breakout
I am upgrading SLVO to a buy, as silver appears poised to play catch-up to gold amid improving macro conditions and fiscal concerns. SLVO's covered call strategy has outperformed SLV recently due to steady silver prices, but may lag in sharp rallies; high yields remain attractive. Trump's softened tariff stance and the likely passage of the BBB plan could weaken the dollar, drive capital outflows from U.S. markets, and boost silver prices.
SLVO: Adding A Silver Lining To Your Income Portfolio
As an income investor, I recommend diversifying into commodities like silver to hedge against falling stock prices and inflation, especially during market corrections. Silver demand is driven by industrial consumption, renewable energy growth, and global uncertainty, with prices rising due to a supply deficit and increased usage in electric vehicles and solar panels. UBS ETRACS Silver Shares Covered Call ETN offers high-yield income and potential price appreciation, making it a suitable choice for income investors amid current macroeconomic conditions.
The Hidden Costs Of SLVO's High Yield
SLVO offers high monthly dividends through a covered call strategy but caps upside potential, making it less ideal during strong silver rallies. Despite a bullish outlook on silver, SLVO's structure and historical underperformance suggest direct investments like SLV or self-managed strategies might yield better returns. SLVO's 32% yield is appealing for income-focused investors, but its expense ratio and capped gains limit its attractiveness for those seeking significant capital growth.
SLVO: Don't Blow This Bull Run On Covered Calls
I'm bullish on Silver, due to its fundamental setup, highlighted by a 6-year running supply/demand deficit. Despite my bullishness on Silver, I'm bearish of the Credit Suisse X-Links Silver Shares Covered Call ETN due to its long term under-performance. On the surface, the SLVO ETF's shareholders get a 14% dividend payout. Yet, the total return of the fund since inception has been negative for more than 11 years.
