Glittering Returns: iShares Silver Trust Outpaces Sprott Gold Miners ETF
Written by Brendan Coffey for The Motley Fool -> iShares Silver Trust provides exposure to physical silver prices and has significantly outperformed Sprott Gold Miners ETF over the trailing 12 months The nature of owning metals vs. metal miners, along with tax considerations, m
iShares Silver Trust provides exposure to physical silver prices and has significantly outperformed Sprott Gold Miners ETF over the trailing 12 months
The nature of owning metals vs. metal miners, along with tax considerations, means past performance shouldn't be the deciding factor.
Both funds exhibit high volatility, with five-year maximum drawdowns exceeding 40%
Precious metal shave been one of the market’s hottest sectors the past year. The iShares Silver Trust (NYSEMKT:SLV) provides direct exposure to silver prices, whereas Sprott Gold Miners ETF (NYSEMKT:SGDM) targets the equity of companies mining gold, leading to different risk-return profiles and income potential.
Investors looking for precious metals exposure can choose between owning the physical commodity and the companies that extract it. While both can serve as inflation hedges, investing in the metals directly often exhibits volatility patterns different from those of metal mining stocks, which are influenced by corporate balance sheets and operational costs.
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.
The iShares Silver Trust aims to track the performance of physical silver prices, providing direct exposure to the metal without buying physical silver or investing in companies that mine it. Launched in 2006, the trust allocates 100% of its assets to the basic materials sector through its physical silver holdings. Because it owns a commodity rather than equities, it cannot pay dividends.
The Sprott Gold Miners ETF tracks an index of U.S. and Canada-listed gold mining companies. Launched in 2014, the fund holds 39 securities and similarly maintains 100% exposure to the basic materials sector. Its largest holdings include 11.48% of its portfolio in Agnico Eagle Mines (TSX:AEM.TO), about 8.5% in Barrick Mining (TSX:ABX.TO), and just over 8% in Newmont (NYSE:NEM) . The fund has a trailing-12-month dividend of $0.73 per share.
