The surge in precious metals prices through early 2026 has reignited investor interest in mining equities, with both gold and silver reaching record highs. For those seeking leveraged exposure through exchange-traded funds, the choice between the Global X Silver Miners ETF (SIL) and the Sprott Gold Miners ETF (SGDM) hinges on more than metal preference. Differences in portfolio construction, volatility, cost structure, and geographic exposure could meaningfully shape long-term outcomes.

Cost, Performance and Risk Profile

From a cost perspective, SGDM carries a modest edge with a 0.50% expense ratio compared with SIL’s 0.65%. While a 15-basis-point difference may seem minor, it compounds over time, particularly in cyclical sectors prone to volatility.

Performance metrics present a more nuanced picture. Over the past five years, a hypothetical $1,000 investment grew to approximately $3,237 in SGDM versus $2,515 in SIL. However, SIL has recently outpaced gold-focused peers amid stronger silver momentum. Volatility remains a distinguishing factor: SIL experienced a five-year maximum drawdown of nearly 57%, compared with roughly 50% for SGDM. Silver miners typically display higher beta due to silver’s dual role as both a monetary and industrial metal, amplifying price swings.

Investors seeking relative stability within the precious metals segment may find SGDM’s lower historical drawdowns appealing, particularly during risk-off cycles.

Portfolio Construction and Geographic Exposure

SGDM targets gold producers, allocating 100% to basic materials while emphasizing North American exposure, with approximately three-quarters of its holdings based in Canada. Its top positions include Agnico Eagle Mines, Newmont, and Wheaton Precious Metals. The fund applies fundamental screening criteria, favoring companies with stronger revenue growth, healthier cash-flow profiles, and lower debt-to-equity ratios. This quality filter differentiates SGDM from more purely market-cap-weighted strategies.

SIL, by contrast, tracks the Solactive Global Silver Miners Total Return Index and focuses on market capitalization and trading liquidity rather than fundamental metrics. Its top holdings include Wheaton Precious Metals, Pan American Silver, and Coeur Mining. The ETF provides broader international exposure and a more direct link to silver price volatility.

The structural difference is critical. SGDM’s factor-based methodology may moderate downside risk during commodity corrections, while SIL’s market-cap weighting can magnify cyclical swings.

Strategic Considerations in a Commodity Cycle

Gold often serves as a monetary hedge during geopolitical tension and currency debasement, while silver benefits additionally from industrial demand linked to electrification and renewable energy. In strong economic expansions, silver miners can outperform gold peers due to industrial tailwinds. In recessionary or financial stress periods, gold miners historically demonstrate more defensive characteristics.

The decision between SGDM and SIL ultimately reflects an investor’s macro thesis. Those anticipating sustained inflation and industrial growth may favor silver exposure. Investors prioritizing relative stability and balance-sheet strength within mining equities may lean toward SGDM.

Looking ahead, the durability of the precious metals rally will depend on real interest rates, central bank policy signals, and geopolitical developments. Mining ETFs inherently introduce operational risk layered atop commodity price exposure. Position sizing and risk tolerance remain essential considerations.

In a market environment marked by fiscal uncertainty and currency volatility, both ETFs offer targeted access to the metals cycle — but their risk-return dynamics diverge meaningfully.