SLV vs. GDX: Precious Metals ETF Assessment

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The iShares Silver Trust (NYSEMKT:SLV) and the VanEck Gold Miners ETF (NYSEMKT:GDX) both represent avenues for investor exposure to the precious metals complex, though their mechanisms diverge significantly. SLV offers a direct, albeit concentrated, play on silver spot pricing, while GDX provides indirect exposure through equity holdings in companies engaged in gold extraction. This analysis will evaluate their relative merits, considering recent performance, cost structures, and inherent risk profiles, to inform a comparative assessment for prospective investors.

Cost & Scale Metrics

Metric SLV GDX
Issuer iShares VanEck
Expense Ratio 0.50% 0.51%
1-Year Return (as of Feb. 7, 2026) 139.15% 137.31%
Beta 0.41 0.65
Assets Under Management (AUM) $47.32 billion $30.77 billion

The expense ratios are demonstrably similar, rendering cost differentials negligible for most investment scales. Notably, GDX distributes dividends, a feature absent in SLV, representing a potential, albeit modest, income component for the former.

Performance & Risk Considerations

Metric SLV GDX
Maximum Drawdown (5-Year) -37.65% -46.52%
Growth of $1,000 (5-Year) $3,174 $2,852

While both ETFs have delivered substantial returns over the past year, a granular examination of risk-adjusted performance reveals divergent characteristics. SLV’s lower beta suggests comparatively reduced volatility relative to the broader market. However, this metric provides an incomplete picture, as silver itself exhibits a propensity for amplified price swings. GDX, benefiting from a degree of diversification across multiple mining entities, presents a somewhat muted volatility profile, although its exposure to operational and idiosyncratic risks inherent in the mining sector must be acknowledged.

Portfolio Composition

GDX maintains exclusive focus on equities of gold mining companies, encompassing a portfolio of 55 firms globally. Key holdings include Agnico Eagle Mines Ltd. (AEM +3.89%), Newmont Corp. (NEM +6.20%), and Barrick Mining Corp. (B +2.71%), collectively constituting nearly a quarter of the fund’s assets. This concentration, while providing focused exposure to the gold mining industry, introduces sector-specific risks. The fund’s nearly two-decade track record suggests a degree of operational stability, but past performance is, of course, no guarantee of future results.

SLV, in contrast, eschews equity holdings, providing direct exposure to silver’s spot price. This simplified structure eliminates company-specific risks but amplifies the impact of fluctuations in the underlying commodity. The fund’s performance is inextricably linked to silver’s market dynamics, rendering it a pure commodity play devoid of dividend income. Both funds exhibit a 100% allocation to basic materials, but SLV’s direct exposure contrasts sharply with GDX’s layered approach.

For a more comprehensive overview of ETF investment strategies, consult the linked guide. [].

Implications for Investors

Investing in SLV necessitates a tolerance for volatility commensurate with silver’s inherent price fluctuations. While silver has demonstrated robust performance, sharp and unpredictable price declines are not uncommon. The metal’s volatility is estimated to be three times greater than that of gold, demanding careful consideration of risk tolerance.

GDX, while potentially exhibiting lower volatility than SLV, remains susceptible to broader market fluctuations and idiosyncratic risks associated with the mining sector. The fund’s dividend distribution, while infrequent (annual), may appeal to income-focused investors. Both ETFs offer compelling avenues for gaining exposure to the precious metals complex, particularly in an environment characterized by weakening U.S. dollar valuations, international economic instability, or geopolitical tensions. However, investors should remain cognizant of the inherent risks and conduct thorough due diligence before allocating capital.

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2026-02-08 04:42