Silver or Gold: Is a Mining Stock Fund Better Than Holding Physical Bullion Through an ETF?

Investors choosing between Global X - Silver Miners ETF (NYSEMKT:SIL) and SPDR Gold Shares (NYSEMKT:GLD) may prioritize the operational leverage of silver miners or the relative price stability of physical gold bullion.

While both funds offer exposure to precious metals, they represent two distinct asset classes. The SPDR trust tracks the price of physical gold, offering a classic hedge against currency devaluation. The Global X fund invests in companies that extract silver, making it more sensitive to corporate earnings, management execution, and industrial demand.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on July 23.

SPDR Gold Shares is the more affordable choice in this matchup, carrying an expense ratio of 0.40%. This is lower than the 0.65% fee charged by Global X - Silver Miners ETF. Investors should note that trading costs and liquidity also play a role in total ownership expenses.

Performance & risk comparison

What's inside

The SPDR Gold Shares is designed to track the market price of physical gold bullion. The fund consists of physical gold with cash holdings as needed. This fund was the pioneering gold ETF introduced in the U.S. and remains the largest fund backed by a tangible asset. It was launched in 2004.

The Global X - Silver Miners ETF mirrors a global index of silver mining companies, looking for both capital growth and income. It has 39 holdings, which are entirely concentrated in the basic materials sector at 100.00%. Its top holdings include Wheaton Precious Metals (NYSE:WPM) at 21.9%, Pan American Silver (NYSE:PAAS) at 12.4%, and Coeur Mining (NYSE:CDE) at 11%. This fund was launched in 2010 and also reports no specific structural quirks. It paid $0.99 per share over the trailing 12 months.

Which fund is the better buy?

Both these funds provide exposure to the precious metals of gold or silver. The two metals have been having one of their best runs in decades. Gold has more than doubled over the past two years as investors have flocked to the yellow metal for its historic inflation-hedging characteristics. Silver has nearly tripled since the start of 2025, partly in tandem with gold and partly due to industrial demand from renewable energy applications.

These funds are quite different, however.

Investors seeking exposure to the metal rally without the time and expense of buying physical commodities or futures contracts directly can buy GLD, the SPDR Gold Shares ETF. Keep in mind that while this is an ETF, holding physical gold through GLD brings different tax implications. In the U.S., gains from these funds will be treated as collectibles, which typically means a higher tax rate than for stocks for most investors. For some investors holding less than a year, the top tax rate is 37%. If you hold them in a tax-advantaged account, such as an IRA, you should sidestep these taxes.

The silver miners fund, SIL, is an indirect play on the strength of metal, since it’s miners, not the metal itself, it invests in. But it’s a pretty good way to play silver. Miner stocks correlate very closely with the price of silver. What’s good about silver miner stocks is that they disproportionately make profits as the price rises, given they have a fixed cost of production that doesn’t rise nearly as fast. That means that even if silver prices actually decline somewhat, miners will still be booking big profits. Ultimately, their stock prices will trace silver downward too, but it’s a less volatile way to play silver’s price.

Performance-wise, GLD beats SIL in the 5- and 10-year time frames, returning 17.5% and 11.3%, compared to SIL’s 14% five-year and 7.6% 10-year annualized returns. SIL wins in the 3-year period, however, with a sterling 46% return compared to 27.7% for GLD.

Ultimately, SIL is the better buy because management of mining stocks can take steps to boost shareholders’ returns, like hiking dividend payouts, buying back shares, or merging at a premium with another miner. Gold bullion just sits there, even if GLD makes holding it simpler.

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

Brendan Coffey 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.