Bars of 1000 gram silver are seen in this picture illustration at a precious metal refinery in Istanbul July 26, 2011. © MURAD SEZER, Newscom, Reuters

Gold gets all the glory, but silver's no slouch.

The price of silver (-SI) has risen about 9 percent since the end of May, more than double the gains in gold, bonds and stocks. This comes after a three-year slump when silver was down 50 percent, trailing gold by 30 percent and the S&P 500 Index ($INX) by 100 percent.

Until recently, it had a dubious distinction as one of the few things left in the investment universe that hadn't rallied in recent years.

Silver suffered a 2.2 percent price drop on July 14 -- gold fell as well -- on fears that the Fed may raise interest rates sooner than expected. But the fundamentals look solid: Silver is benefiting from a drop in total supply, a pickup in manufacturing and increased demand from China.

Only about 10 percent of gold is used for industrial purposes, and its price gets whipsawed by sentiment as investors often rush into it as a safe haven.

With silver, about half of the demand comes from industrial uses -- it's in everything from cellphones to solar panels. The other half, as with gold, is used for jewelry and as a store of value.

So silver's versatility as a sort of dual-purpose metal compared to gold may put it in the sweet spot now, as a portfolio diversifier for investors weary of stocks, and one that's sensitive to improvements in the global economy.

Buying an ETF backed by physical silver is the most popular and conservative way to play gold's less glittery cousin. The ETFS Physical Silver Shares (SIVR) holds bars of silver in vaults in London and Switzerland. It's up 5.8 percent so far in 2014.

It isn't as big or well-known as the $6.7 billion iShares Silver Trust (SLV), but does the same thing for nearly half the cost. SIVR charges 0.30 percent a year in fees versus 0.50 percent for SLV.

That gap may not seem like much, but it adds up over time. SIVR outperformed SLV by 1.5 percent over the past five years; the difference is due to SLV's higher cost. SIVR has $400 million in assets and trades just under 100,000 shares a day. That's a healthy amount of trading and puts SIVR in the top quartile of the most liquid commodity ETFs.

Investors can also consider ETFs that focus on silver mining stocks. The PureFunds ISE Junior Silver Small Cap Miners/Explorers ETF (SILJ) tracks small-cap silver miners and explorers. It's up 48 percent, making it one of the top five performers so far this year, and one of the top five most volatile. It's about four times as jumpy as the S&P 500. The ETF is tiny, with $10 million in assets, and charges a high expense ratio of 0.69 percent.

Investors comfortable with the credit risk that comes with exchange-traded notes (ETNs) can buy a silver exchange-traded note. ETNs are unsecured debt obligations backed by the credit of their issuer, which adds a risk that wouldn't exist with, say, SILJ. The Credit Suisse Silver Shares Covered Call ETN (SLVO) has a yield of 16.3 percent, the highest of all exchange-traded products, meaning exchange-traded funds and exchange-traded notes.

SLVO essentially makes a bet that silver will rise by buying SLV. Then it turns around and hedges its bet. It does that by selling monthly call options on SLV. The call options are agreements that give buyers the right to buy shares of SLV from the ETF over a set period at a set price -- which right now is about 6 percent above the current price. In exchange for that right, the buyer pays the ETF a premium, which is passed along to investors as income.

If SLV doesn't rise 6 percent over the life of the option, then the ETF pockets the income and keeps the SLV shares. If SLV spiked over 6 percent, the buyer of that call option could exercise it and get those SLV shares for less than they're currently worth. So, somewhat perversely, while investors in SLVO are betting that silver will rise, they'll do better if it doesn't rise too much too fast.

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