iShares Silver ETF Tops Global X Rival in Yield and Five-Year Returns

The iShares MSCI Global Silver and Metals Miners ETF (NYSEMKT:SLVP) offers lower holding costs and a higher trailing payout, while the Global X - Silver Miners ETF (NYSEMKT:SIL) provides deeper liquidity through its larger asset base.

Investors looking for exposure to the silver mining industry often choose between these two primary funds. While both ETFs focus on global miners, differences in their expense structures, trading volume, and specific stock concentrations can significantly impact the long-term results for a portfolio dedicated to precious metals.

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. Dividend yield is the trailing-12-month distribution yield.

Performance & risk comparison

The Global X - Silver Miners ETF seeks to track the Solactive Global Silver Miners Total Return Index, covering the full lifecycle of silver production. Its portfolio is concentrated 100% in the basic materials sector and holds 40 positions. Its largest holdings include Wheaton Precious Metals (NYSE:WPM) at 21.97%, Pan American Silver (NYSE:PAAS) at 12.42%, and Coeur Mining (NYSE:CDE) at 11.05%. The fund was launched in 2010. Global X - Silver Miners ETF has paid $1.02 per share over the trailing 12 months, which on its recent ~$77.46 share price works out to a 1.30% yield.

The iShares MSCI Global Silver and Metals Miners ETF provides exposure to a global index of companies primarily involved in silver and other metal exploration. Entirely focused on basic materials, the fund holds 37 stocks in its portfolio. Its largest positions include Hecla Mining (NYSE:HL) at 13.54%, Indust Penoles at 10.95%, and First Majestic Silver at 10.27%. The fund was launched in 2012. iShares MSCI Global Silver and Metals Miners ETF has paid $0.70 per share over the trailing 12 months, which on its recent ~$30.83 share price works out to a 2.30% yield.

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Which fund is the better buy?

In comparing the two, the iShares fund’s much lower expense ratio appears to give it an advantage over its Global X rival, whose expense ratio is 26 basis points higher.

However, the comparison between the two metals ETFs actually goes beyond that one factor. Over the most recent five-year period, the iShares fund outperformed the Global X, even when considering the 130 additional basis points a Global X shareholder would have paid over that time.

Moreover, the iShares fund appears to be more diversified. Its top three holdings account for just under 35% of the total, compared to more than 45% in the Global X Funds’ top three. Unfortunately, the slightly lower returns indicate this approach has not paid off for the company.

Finally, iShares funds’ 2.3% dividend yield is around 100 basis points higher than Global X’s payout. Admittedly, this was not always the case over the last five years, but the iShares benefited from a rising yield over the last year.

Thus, investors who choose the iShares fund appear to earn higher returns at a lower cost.

Will Healy 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.