GLDM vs. SIL: How These Gold and Silver ETFs Stack Up on Fees, Risk, and Performance

The Global X - Silver Miners ETF (NYSEMKT:SIL) and the SPDR Gold MiniShares Trust (NYSEMKT:GLDM) both appeal to investors interested in precious metals, but the vehicles are fundamentally different: SIL holds a global basket of silver miners, while GLDM is a physically backed gold trust.

This comparison explores which fund may appeal more, depending on cost sensitivity, risk tolerance, and desired exposure to gold versus silver equities.

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.

GLDM is much more affordable, charging a fraction of the expense ratio of SIL, but it does not pay a dividend. SIL offers the edge for investors most focused on dividend income, but GLDM can help investors save money on fees.

Performance & risk comparison

What's inside

GLDM is a trust that holds only physical gold, aiming for 100% exposure to the bullion price. The fund has been available for more than seven years and is designed for investors seeking a low-cost, convenient way to track gold, without any operating companies or sector tilts.

SIL, by contrast, is made up entirely of basic materials stocks -- specifically, silver mining companies. Its top positions include Wheaton Precious Metals, Pan American Silver, and Coeur Mining, which together account for over 40% of assets.

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

What this means for investors

Both SIL and GLDM offer access to the precious metals sector, but in different ways with different focuses.

GLDM provides exposure to physical gold, while SIL focuses on companies that mine silver. That distinction can make a difference, especially when it comes to risk and returns. Investors in SIL are exposed to both silver prices and the operational and financial risks of the mining sector, which can be lucrative or volatile, depending on how the sector is faring.

SIL has experienced significantly higher levels of volatility over the last five years, with a max drawdown more than double that of GLDM. It also has a higher beta, signifying more significant price fluctuations.

That risk has paid off over the past 12 months, as SIL has earned substantially higher returns than GLDM. However, SIL has underperformed over the last five years, reflecting gold’s steadier price behavior versus the boom-bust cycles of silver miners.

For investors willing to take on higher levels of risk for the chance to earn more lucrative returns, SIL could be a better option. But for those seeking greater stability, GLDM's exposure to physical gold may result in less volatility over time.

Glossary

ETF (Exchange-traded fund): A fund that trades on stock exchanges, holding a basket of assets.
Expense ratio: Annual fund operating costs, expressed as a percentage of the fund’s average assets.
Dividend yield: Annual dividends per share divided by the current share price, shown as a percentage.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Beta: A measure of how volatile an investment is compared with a benchmark index, usually the S&P 500.
AUM (Assets under management): The total market value of all assets managed by a fund.
Max drawdown: The largest peak-to-trough decline in an investment’s value over a specific period.
Compounded growth: Growth where returns are reinvested, so gains themselves begin to earn additional returns.
Physically backed gold trust: A fund structure that holds actual gold bullion to track the metal’s price.
Sector tilt: When a fund has heavier exposure to certain industries or sectors than the broader market.
Basic materials sector: Industry group including companies that extract or process raw materials like metals, minerals, and chemicals.
Mining sector: Industry of companies that explore for, extract, and process minerals and metals from the earth.

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.