Silver ETFs: SLV Is a Bigger Fund But SIVR Is More Affordable

Comparing the abrdn Physical Silver Shares ETF (NYSEMKT:SIVR) and the iShares Silver Trust (NYSEMKT:SLV) means weighing two of the largest physical silver exchange-traded funds (ETFs) available.

Both are designed to reflect silver’s spot price, offering a simpler alternative to direct metal ownership. But the two ETFs differ in fees, fund size, and trading characteristics. SIVR is lower cost, while SLV offers deeper liquidity.

Here’s how these two funds stack up for investors seeking silver exposure.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; figures use five-year weekly returns.

SIVR is more affordable, with a 0.30% expense ratio versus SLV’s 0.50% (as reported by Financial Modeling Prep). That fee gap could matter for cost-conscious buy-and-hold investors, though both funds are relatively low-cost options in the commodity ETF space.

Performance & risk comparison

What's inside

iShares Silver Trust is a nearly two-decade-old fund with over $22 billion in assets under management (AUM). It is designed to track silver’s price and is one of the largest, most liquid silver ETFs globally.

The abrdn Physical Silver Shares ETF, launched in 2009, pursues the same goal as SLV -- hold physical silver bullion to offer exposure to silver prices. Its $3 billion in assets, however, is substantially lower than SLV's. Its lack of quirks means a straightforward approach to physical silver exposure, similar to SLV. Neither fund pays a dividend.

For more guidance on ETF investing, check out the full guide at this link.

Foolish take

Silver is a precious metal like gold, and both metals are considered a hedge against economic uncertainty and inflation. That aside, there’s one big difference between gold and silver. While gold is primarily used for jewelry, silver has extensive industrial applications because of its high electrical conductivity. In fact, almost 60% of the global demand for silver comes from the industrials sector, especially electricals and electronics industries. Semiconductors, touch screens, circuit boards, photovoltaic solar cells, jet engine bearings, and electric vehicles are some of biggest end use cases for silver metal.

Investors seeking exposure to silver can buy physical silver, silver stocks, or silver futures, but one of the best ways to invest in silver is through silver ETFs that may provide exposure to either direct silver or silver stocks, or a mix of the two. The abrdn Physical Silver Shares ETF and iShares Silver Trust hold physical silver and, therefore provide direct exposure to the metal and its price. The price performances of the two ETFs closely mirror each other.

SLV data by YCharts

Between the two ETFs though, the abrdn Physical Silver Shares ETF’s lower expense ratio of 0.30% versus the iShares Silver Trust’s ratio of 0.50% makes it a cheaper bet and can make a considerable difference in your total returns in the long term. That’s because for every $1,000 you invest in the two ETFs, you pay only $3 per year towards SIVR fund’s expenses versus $5 a year for SLV.

Glossary

ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding assets like stocks, bonds, or commodities.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Assets Under Management (AUM): The total market value of assets that a fund manages on behalf of investors.
Liquidity: How easily an asset or security can be bought or sold in the market without affecting its price.
Spot price: The current market price at which a commodity, like silver, can be bought or sold for immediate delivery.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
Physical silver exposure: Investment approach where a fund holds actual silver bullion to track silver prices.
Trading spread: The difference between the bid and ask prices for a security, reflecting transaction costs and liquidity.
Dividend: A payment made by a company or fund to its shareholders, usually from profits. Not all funds pay dividends.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.