Investors looking to capitalize on the precious metals boom often face a fundamental choice: gain exposure through the metals themselves or through the companies that produce them. Two of the most widely followed vehicles illustrate this distinction clearly. The iShares Silver Trust tracks the price of silver almost one-for-one, while the VanEck Gold Miners ETF provides equity exposure to global gold mining companies. While both sit within the same broad asset class, their behavior in portfolios can diverge sharply.

Performance and Cost in Context

On the surface, recent performance has been remarkably similar. Over the past year, both ETFs posted gains well above 130%, reflecting a powerful rally across precious metals. Expense ratios are also nearly identical, hovering around 0.5%, meaning costs are unlikely to be a deciding factor for most long-term investors.

Where differences begin to emerge is volatility. SLV’s beta relative to the S&P 500 is lower than GDX’s, but that statistic can be misleading. Silver itself is historically far more volatile than gold, with sharp price swings driven by speculative flows, industrial demand, and thin liquidity. As a result, SLV can experience sudden drawdowns even when the broader equity market is stable.

Risk Profiles and Drawdowns

Over a five-year period, SLV has experienced a maximum drawdown of roughly 38%, while GDX’s drawdown exceeded 46%. That deeper decline reflects the layered risks embedded in mining equities. Gold miners are not just a play on bullion prices; they are also exposed to operational costs, labor issues, geopolitical risk in mining jurisdictions, and equity market sentiment.

Despite that, SLV has delivered stronger long-term growth of capital over five years, turning $1,000 into more than $3,100 compared with roughly $2,850 for GDX. This underscores how direct commodity exposure can outperform equities when price trends dominate fundamentals.

What You Actually Own

The structural difference between the two funds is critical. GDX holds stakes in 55 gold mining companies worldwide, with large positions in producers such as Agnico Eagle Mines, Newmont, and Barrick Mining. This equity exposure allows GDX to generate dividend income, albeit typically paid annually, and can magnify gains during periods of rising margins and disciplined capital allocation.

SLV, by contrast, owns no companies. It is a pure reflection of silver prices, with no income stream and no operational risk. That simplicity appeals to investors seeking a straightforward hedge against currency weakness or geopolitical stress, but it also means there is no buffer when silver prices correct.

Strategic Fit for Investors

For investors focused on tactical positioning or macro hedging, SLV offers clean exposure to one of the most volatile precious metals, which can be advantageous in strong bull phases but punishing during reversals. GDX, meanwhile, may suit those willing to accept equity risk in exchange for potential dividends and leverage to rising gold prices.

Ultimately, neither ETF is inherently superior. The decision hinges on whether an investor prefers pure price exposure or is comfortable layering equity dynamics on top of a commodities thesis.