Gold Trust Edges Out Silver Trust as Better Buy Amid Volatility

The iShares Gold Trust (IAU) and the iShares Silver Trust (SLV) are two popular precious metal ETFs that offer investors a way to gain exposure to gold and silver without directly buying physical commodities. In terms of ongoing costs, IAU is significantly more affordable for long-term investors, charging an expense ratio of 0.25% annually compared to SLV's 0.5%. The historical price swings of these two metals also differ, with gold generally being less volatile than silver.

A snapshot comparison shows that IAU has a lower share price ($77.30) and a higher asset under management (AUM) ($59.4 billion) compared to SLV ($53.50 and $27.8 billion respectively). The expense ratio is the primary differentiator between these two funds, making IAU a more attractive option for long-term investors.

In terms of performance, both funds have had impressive returns over the past five years, with IAU returning 25.4% and SLV returning 59.7%. However, silver has nearly tripled since the start of 2025, partly in tandem with gold and partly due to industrial demand from renewable energy applications.

The iShares Silver Trust ETF has had an exceptional year with a nearly 60% return, while IAU has had a very good year but with lower returns at 22.2%. Over the long-term, both funds have delivered impressive annualized returns, with IAU returning 27.9%, 17.7%, and 11.5% over the 3-, 5-, and 10-year time-frames respectively.

One thing to keep in mind is that gains from these funds are taxed as collectibles in the U.S., which typically means a higher tax rate than for stocks for most investors. Ultimately, the gold fund appears to be the better buy given the prospect of persistent inflation and investor demand for gold higher going forward.