GDX vs. SLV: Which Metals ETF Should You Buy?

The VanEck Gold Miners ETF (NYSEMKT:GDX) and the iShares Silver Trust (NYSEMKT:SLV) both offer basic materials exposure with nearly identical expense ratios. Still, SLV tracks physical silver prices while GDX invests in a basket of gold mining stocks.

GDX and SLV appeal to investors interested in precious metals, yet they represent two distinct approaches: GDX takes an equity route by holding shares of major gold miners. At the same time, SLV provides direct exposure to silver’s spot price. This comparison breaks down key differences in cost, performance, risk, and portfolio construction to help clarify which ETF may appeal depending on investment goals.

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 ETFs are similarly priced, with SLV at a 0.50% annual expense ratio and GDX at 0.51%, so cost differences are negligible.

Performance & risk comparison

Both funds have seen large swings, but SLV experienced a smaller maximum drawdown over five years and slightly better long-term growth, reflecting the different risk profiles of physical silver versus gold mining equities.

What's inside

GDX offers exposure to 57 global gold mining companies, all of which are in the basic materials sector. The largest holdings are currently Agnico Eagle Mines Ltd (NYSE:AEM), Newmont (NYSE:NEM), and Barrick Mining Corp (NYSE:B). These positions account for a significant share of assets. The fund’s nearly 20-year track record may appeal to those seeking diversified equity exposure tied to gold prices. Still, returns will be influenced by both gold’s value and the operating performance of mining firms.

SLV, by contrast, is a pure-play on physical silver, reflecting the metal’s price movements without any company-specific or operational risk. Its entire exposure is to basic materials, but it does not hold equity positions—just the underlying commodity. This makes SLV structurally simpler and more direct for those seeking silver price participation.

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

What this means for investors

Both of these precious metals ETFs share similar expense ratios and asset sizes. These funds have also delivered roughly similar returns over the past five years, with SLV slightly outperforming GDX through the end of March.

The key distinction between these funds is that GDX focuses on mining companies, while SLV is a bet on the directional movement of the physical price of silver. The advantage for GDX is that some of the mining stocks pay dividends, although it’s not much at 0.67%.

But keep in mind that GDX has underperformed gold since its inception. This highlights the added risk of investing in a mining fund. With GDX, investors are essentially making two bets — one on the direction of gold prices and the other on the performance of the mining companies in the fund.

However, there could be periods when GDX outperforms gold, such as when company margins expand during a bull market.

SLV doesn’t pay dividends, but it doesn’t have the added company risk of GDX. It’s a simpler bet on the directional price of silver, with no operational risks or leverage.

John Ballard 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.