Silver Miners ETF Outshines Gold Bullion Fund in Three-Year Performance
The two funds, SPDR Gold Shares and Global X - Silver Miners ETF, offer exposure to precious metals. The SPDR trust tracks the price of physical gold, offering a classic hedge against currency devaluation. On the other hand, the Global X fund invests in companies that extract silver, making it more sensitive to corporate earnings, management execution, and industrial demand.
The SPDR Gold Shares is the more affordable choice with an expense ratio of 0.40%, lower than the 0.65% fee charged by Global X - Silver Miners ETF. The fund has demonstrated significantly higher volatility with a beta of 0.17 compared to 0.84 for Global X - Silver Miners ETF.
Investors choosing between these two funds may prioritize the operational leverage of silver miners or the relative price stability of physical gold bullion. However, the performance-wise, GLD beats SIL in the 5- and 10-year time frames, returning 17.5% and 11.3%, compared to SIL’s 14% five-year and 7.6% 10-year annualized returns.
SIL wins in the 3-year period with a sterling 46% return compared to 27.7% for GLD. Ultimately, SIL is the better buy because management of mining stocks can take steps to boost shareholders’ returns, like hiking dividend payouts, buying back shares, or merging at a premium with another miner.