Physical Gold or Silver Stocks? A Deep Dive Into IAU and SIL ETFs

The **Global X - Silver Miners ETF **(SIL +2.25%) and the iShares Gold Trust (IAU +2.74%) are popular ways to access precious metals, but they take very different approaches: SIL invests in silver mining companies, while IAU holds physical gold. The two ETFs differ most in their underlying assets, risk profiles, and cost — factors we break down next to help investors make informed decisions.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

Performance & risk comparison

What’s inside

IAU is structured to closely mirror the price of physical gold, making it a direct play on gold bullion rather than gold mining companies. The fund held 16.07 ounces in trust as of Feb. 20. and has been operating for 21 years. With over $80 billion in assets under management, IAU is one of the most liquid ways to gain exposure to gold, though it does not pay dividends.

In contrast, SIL holds a basket of silver mining stocks. Its largest positions are Wheaton Precious Metals(WPM +3.64%), Pan American Silver (PAAS +0.74%), and Coeur Mining (CDE 0.91%), which together make up over 40% of the fund. This gives SIL indirect exposure to silver prices, but performance can also be affected by company-specific events and equity market swings. SIL holds 39 stocks and does not employ any leverage or hedging strategies.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

There are two major differences between the Global X - Silver Miners ETF and the iShares Gold Trust. SIL focuses on silver and is an equity ETF, as it holds stocks of silver mining companies. IAU focuses on gold and is a commodity ETF, holding physical bullion in a vault rather than investing in gold mining stocks.

IAU is a pure play on gold itself and one of the most direct ways to invest in gold without the hassle and risk of owning and storing physical bullion. Because physical gold ETFs like IAU closely track the price of gold, they typically rise and fall by roughly the same percentage as gold, though there are differences due to expense ratios and tracking errors.

SIL Total Return Price data by YCharts

SIL’s performance, on the other hand, depends on the performance of individual stocks in its portfolio. For instance, if the largest holding rallies on company-specific developments, SIL is likely to rise as well. SIL holds stocks of global silver miners, therefore providing investors with a broad-based and diversified exposure to silver stocks.

IAU is a typical “safe-haven” asset like physical gold, with a low expense ratio that makes it a reasonable bet on the yellow metal. Silver is primarily an industrial metal, and SIL is a good choice to bet indirectly on silver through stocks, albeit a higher expense ratio can cut into returns in the long term.