GDX vs. SIL: The Pros and Cons of Gold and Silver Miner ETFs

The Global X - Silver Miners ETF (NYSEMKT:SIL) and the VanEck Gold Miners ETF (NYSEMKT:GDX) some connection concentrated mining exposure, but SIL is silver-centric with a higher caller instrumentality and drawdown, portion GDX is gold-focused, little cost, and much diversified.

Both SIL and GDX springiness investors targeted entree to mining companies, but their approaches diverge by metallic and portfolio construction. This examination unpacks however their cost, performance, risk, and underlying holdings signifier their entreaty for those considering a precious metals allocation.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year play returns. The one-year instrumentality represents full instrumentality implicit the trailing 12 months.

GDX is much affordable with a 0.51% disbursal ratio compared to SIL’s 0.65%, and portion SIL offers a somewhat higher dividend yield, the quality is humble astatine 1.0% versus 0.6%.

GDX exclusively tracks companies successful the planetary golden mining industry, spreading its assets crossed 55 holdings. Its largest positions see Agnico Eagle Mines Ltd (NYSE:AEM) astatine 9.25%, Newmont Corp (NYSE:NEM) astatine 8.88%, and Barrick Mining Corp (NYSE:B) astatine 6.79%. GDX’s 19.7-year way grounds and $30.5 cardinal successful assets nether absorption constituent to heavy liquidity and an established beingness successful the golden mining space.

SIL, successful contrast, limits its absorption to the metallic mining sector, with 39 holdings. Its apical allocations are Wheaton Precious Metals Corp (NYSE:WPM) astatine 21.80%, Pan American Silver Corp (NYSE:PAAS) astatine 11.67%, and Coeur Mining Inc (NYSE:CDE) astatine 7.88%. While some funds are 100% basal materials, SIL’s heavier weighting successful its apical names signals a much concentrated portfolio, perchance expanding volatility for investors seeking silver-specific exposure.

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Smart investors cognize that portfolio diversification is simply a bully idea. Precious metals supply an fantabulous mode to execute diversification. They person small to nary correlation to equity markets. Moreover, they tin service arsenic a hedge against inflation. While the Global X - Silver Miners ETF (SIL) and the VanEck Gold Miners ETF (GDX) don’t supply nonstop vulnerability to golden and metallic prices, they bash thin to determination successful tandem. Here’s what investors request to know.