The Global X Silver Miners ETF (SIL) Offers Broader Diversification Than the iShares MSCI Global Silver and Metals Miners ETF (SLVP)

The iShares MSCI Global Silver and Metals Miners ETF (NYSEMKT:SLVP) has outperformed the Global X - Silver Miners ETF (NYSEMKT:SIL) over the past year, but SIL stands out for its higher yield, greater number of holdings, and much larger assets under management (AUM).

Both SLVP and SIL are designed to give investors exposure to global silver mining companies, but they differ in cost, yield, and portfolio breadth. SLVP focuses on a narrower group of silver and metals miners, while SIL tracks a broader index of global silver mining firms, offering more diversification and a longer track record.

Snapshot (cost & size)

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

SIL comes with a higher expense ratio than SLVP, making SLVP more affordable for cost-focused investors. However, SIL offers a higher dividend yield, which may appeal to those seeking more income from their investment.

Performance & risk comparison

What's inside

SIL is fully concentrated in basic materials, holding 40 companies, and has been operating for more than 15 years. Its top positions include Wheaton Precious (NYSE:WPM), Pan American Silver (NYSE:PAAS), and Coeur Mining (NYSE:CDE), providing diversified exposure to global silver miners, from streaming companies to established producers. With $3.6 billion in assets under management (AUM) and a long track record, SIL may offer greater liquidity and trading flexibility for investors.

SLVP is also entirely focused on basic materials but is somewhat more concentrated, with only 28 holdings. Its largest allocations are to Hecla Mining (NYSE:HL), Indust Penoles (OTC:IPOAF), and Fresnillo (OTC:FNLPF), resulting in a similar but slightly narrower portfolio compared to SIL. Both funds lack specialized screens or unique portfolio quirks, so their sector tilts and exposures are mainly determined by their respective index methodologies and constituent weights.

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Foolish take

The global silver market was estimated at $7 billion in 2023 and is expected to reach over $11 billion by 2028. In addition to its well-known use as a store of value, silver is increasingly important to businesses that manufacture solar panels, lighting, and electronic devices.

The iShares MSCI Global Silver and Metals Miners ETF and the Global X - Silver Miners ETF both follow silver, but they're not the same. The iShares MSCI Global Silver and Metals Miners ETF tracks the MSCI ACWI Select Silver Miners Investable Market Index, while the Global X - Silver Miners ETF tracks the Solactive Global Silver Miners Total Return Index.

The Solactive Global Silver Miners Total Return Index tracks between 20 and 40 companies that are active in the silver mining industry. Its individual component weightings are capped at 22.5% and the maximum number of constituents is 40.

The MSCI ACWI Select Silver Miners Investable Market Index focuses on companies that are highly sensitive to silver prices.

Glossary

ETF: Exchange-traded fund; a pooled investment that trades on stock exchanges like a single stock.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges investors for management and operations.
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, expressed as a percentage.
Assets under management (AUM): The total market value of all assets a fund manages on behalf of investors.
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 specified period.
Holdings: The individual securities or assets that make up a fund’s portfolio.
Basic materials: Companies involved in the extraction or production of raw materials, such as metals and minerals.
Index construction: The rules and methodology used to select and weight securities within a market index.
Liquidity: How easily an asset or fund can be bought or sold without affecting its price.
Streaming firms: Companies that finance mining projects in exchange for the right to buy a portion of future production at a set price.

Cory Renauer 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.