GLD Offers Stability While SLVP Delivers Bigger Swings

The iShares MSCI Global Silver and Metals Miners ETF (NYSEMKT:SLVP) and SPDR Gold Shares (NYSEMKT:GLD) differ most in their underlying exposures -- silver miners versus physical gold -- while also showing sharp contrasts in risk, recent returns, and trading scale.

The iShares MSCI Global Silver and Metals Miners ETF is designed to capture the performance of global companies focused on silver exploration and mining, which can make it more volatile and potentially more rewarding in strong precious metals markets. SPDR Gold Shares, by contrast, offers direct exposure to gold bullion, providing a highly liquid, lower-volatility way to participate in gold price movements. This comparison explores the cost, performance, risk, and portfolio makeup of each ETF for those weighing a precious metals allocation.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.

Both funds have nearly identical expense ratios, with SLVP at 0.39% and GLD at 0.4%, so cost alone is unlikely to sway most investors between the two.

Performance & risk comparison

What's inside

SPDR Gold Shares is structured to mirror the price of physical gold, offering investors a straightforward way to gain gold exposure without handling bullion. With over $155 billion in assets under management and more than 21 years on the market, it stands out for its sheer scale and liquidity, appealing to those seeking efficient, direct gold allocation. The fund is classified fully under basic materials, does not disclose individual holdings beyond physical gold, and does not pay a dividend.

SLVP, on the other hand, tracks a basket of global silver and metals mining companies, also landing in the basic materials sector. Its top holdings -- Hecla Mining, Fresnillo Plc, and Industrias Penoles -- can introduce company-specific risks and opportunities not present in a pure commodity ETF. SLVP holds 36 stocks, offering more diversification within mining but with exposure to operational and geopolitical factors impacting miners.

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What this means for investors

Investing in precious metals can serve different investing goals. Gold is often viewed as a store of value, with little price volatility and an opportunity for capital preservation. Silver, on the other hand, is often less expensive but more volatile, as it is used in several industrial processes including electrical components, solar energy, and electric vehicles.

Moreover, GLD and SLVP offer investors exposure to precious metals in very different ways. GLD is strictly a way to track the price performance of gold, less the minimal fees SPDR charges investors. SLVP offers exposure to mining companies, primarily those that explore for and mine silver, but also those that mine gold and other materials. The stocks of these companies are often more volatile than the prices of their underlying metals, as they contend with market demand, operational costs, and interest rates. It’s the reason SLVP’s one-year return is 3 times GLD’s, but its max drawdown over five years is also more than double the gold ETF’s.

Investors looking for both safety and potential upside in an area of the market that’s a bit removed from today’s hot tech tickers may want to consider putting some capital toward each of these metals options. Otherwise, those looking for a safe-haven store of value will have better luck with GLD, while those with a bigger appetite for risk and potential rewards may be more interested in SLVP.

Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool recommends Fresnillo Plc. The Motley Fool has a disclosure policy.