Precious metals mining ETFs give investors a way to participate in the performance of gold and silver mining companies, but different products have clear differences in strategy. The iShares MSCI Global Silver and Metals Miners ETF (SLVP) provides broad exposure to global silver and metals mining, while the Sprott Gold Miners ETF (SGDM) concentrates its investments in North American gold producers. Although both belong to the precious metals mining sector, they represent different industrial and monetary attributes.
In terms of holding costs, the iShares fund has a slight advantage. SLVP’s annual expense ratio is 0.39%, 0.07 percentage points lower than SGDM’s 0.46%. For income-focused investors, SLVP’s dividend yield is 2.3%, notably higher than SGDM’s 1.1%.
Looking at five-year performance, SGDM’s total return is more prominent. Based on a $1,000 investment, SGDM grew to $2,570 after five years, while SLVP grew to $2,275. However, SLVP’s maximum drawdown was 47.7%, slightly higher than SGDM’s 45.0%. Both funds outperformed the S&P 500 Index over the past five years.
Underlying Asset Composition
SGDM focuses on gold production companies in the United States and Canada, typically allocating at least 90% of its assets to such securities. The fund adopts a non-diversified strategy and holds 48 stocks. Its top three holdings are Agnico Eagle Mines (AEM), Newmont (NEM), and Barrick Mining (B), all concentrated in the basic materials sector. It was launched in 2014.
SLVP tracks an index of global silver exploration and other metals mining companies and holds 36 stocks. Its top three holdings are Hecla Mining (HL), Indust Penoles, and First Majestic Silver (AG), with sector allocation at 100% metals and mining. It was launched in 2012.
Differences in Investment Orientation
SLVP focuses on silver mining and holds about 35 stocks, most located in North America; SGDM focuses on gold mining and holds about 50 stocks listed on major exchanges in the United States and Canada. Both hold mining company stocks rather than physical gold and silver, so both can generate some income. SLVP’s five-year total return is 137%, with a compound annual growth rate of 18.8%; SGDM’s total return is 171%, with a compound annual growth rate of 22%.
Conclusion
Although SLVP and SGDM both belong to the precious metals mining ETF category, their strategic positioning differs significantly. SLVP has lower fees and a higher dividend yield, making it suitable for investors focused on costs and income; SGDM has stronger five-year returns, making it more suitable for investors bullish on gold prospects. Each has its own focus, and which fund to choose depends on investors’ relative judgment on silver versus gold as well as their own return and risk preferences.