GDX and SIL Offer Materials Exposure, But Differ In Fees, Yields, and Performance

The Global X Silver Miners ETF (NYSEMKT:SIL) and the VanEck Gold Miners ETF (NYSEMKT:GDX) both target mining equities. GDX stands out for its recent outperformance, lower costs, and larger assets under management (AUM), while SIL leans toward silver miners and offers a slightly higher yield. Both funds provide concentrated exposure but differ in cost, risk, and recent returns.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

GDX is more affordable on fees, with an expense ratio of 0.51% compared to SIL’s 0.65%. SIL, on the other hand, offers a higher dividend yield, which may appeal to income-focused investors.

Performance & risk comparison

What's inside

GDX focuses exclusively on gold mining companies, holding 53 positions and spanning a nearly 20-year track record. Its portfolio is concentrated in basic materials, with top positions in Agnico Eagle Mines Ltd, Newmont Corp, and Barrick Mining Corp. The fund’s substantial assets under management support deep liquidity, and its holdings mirror the gold mining segment globally.

SIL also sits entirely within the basic materials sector but narrows its focus to silver miners. It contains 40 stocks, and its top holdings include Wheaton Precious, Pan American Silver Corp, and Coeur Mining Inc. Both funds lack notable quirks or overlays, but SIL’s silver tilt introduces a different set of commodity drivers and risk factors compared to GDX’s gold exposure.

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Foolish take

GDX and SIL both offer exposure to the basic materials industry, but the two funds target different sub-sectors -- with GDX focused on gold mining companies and SIL centered around silver mining.

Aside from their different portfolios, they each have unique strengths in terms of fees, dividend yield, and performance. GDX boasts a lower expense ratio (0.51% compared to 0.65%), which is a plus for fee-conscious investors. However, it also has a lower dividend yield (0.53% compared to 1.17%), which could be a downside for those looking to expand their investment income.

Performance wise, GDX has outperformed SIL in both one- and five-year total returns, and it's also experienced slightly less price volatility with a smaller max drawdown. That can be an advantage for more risk-averse investors who are still looking for long-term growth.

Glossary

ETF: Exchange-traded fund; a pooled investment fund traded on stock exchanges like a stock.
Expense ratio: Annual fee, expressed as a percentage, that funds charge investors to cover operating costs.
Dividend yield: Annual dividends paid by a fund or stock, shown as a percentage of its current price.
Beta: A measure of an investment’s volatility compared to the overall market, typically the S&P 500.
AUM: Assets under management; the total market value of assets a fund manages.
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a period.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Liquidity: How easily an asset or fund can be bought or sold without affecting its price.
Basic materials sector: Industry category including companies that produce raw materials like metals, minerals, and chemicals.
Holdings: The individual securities or assets owned within a fund or portfolio.

Katie Brockman 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.