GDX vs SIL: Which Precious Metals ETF Positions You Better for Mining Exposure?

Understanding Your Options in the Metals Mining Space

The precious metals sector has captured renewed investor interest, with both gold and silver experiencing impressive gains. Two Exchange-Traded Funds dominate this space: VanEck Gold Miners ETF (NYSEMKT:GDX) and Global X - Silver Miners ETF (NYSEMKT:SIL). While both track mining companies within the precious metals industry, their strategic focus and portfolio construction differ significantly, making the choice dependent on your investment objectives and risk tolerance.

Portfolio Composition: Where the Funds Differ Most

GDX’s Diversified Mining Approach

VanEck’s offering maintains broad exposure across the gold mining landscape, holding 56 companies with an 18-year operational track record. The fund emphasizes large-cap operators, with its top three positions being Agnico Eagle Mines Ltd (NYSE:AEM), Newmont Corp (NYSE:NEM), and Barrick Mining Corp (NYSE:B). This structure provides investors with exposure to established, globally-distributed mining operations. The 100% allocation to basic materials ensures pure-play precious metals mining exposure without sector dilution.

SIL’s Concentrated Silver Focus

By contrast, Global X’s vehicle narrows its lens to silver-exclusive miners, holding 39 companies. The portfolio concentrates more heavily, with Wheaton Precious (NYSE:WPM), Pan American Silver Corp (NYSE:PAAS), and Coeur Mining Inc (NYSE:CDE) representing substantial weightings. This structure caters specifically to investors believing in silver’s particular value proposition as both an industrial commodity and store of value.

Financial Metrics: Cost, Size, and Income Generation

On the expense ratio front, GDX edges ahead at 0.51% annually, compared to SIL’s 0.65%—a modest but meaningful difference that compounds over decades. The asset management discrepancy proves more striking: GDX commands $25.7 billion under management versus SIL’s $4.6 billion, suggesting greater liquidity and institutional adoption.

Income generation tells a different story. SIL delivers a 1.08% dividend yield against GDX’s 0.5%, favoring those seeking regular cash distributions. Both funds exhibited identical one-year returns of 151% through mid-December 2025, demonstrating synchronized strength in the precious metals rally.

Risk-Adjusted Performance: Historical Returns and Volatility

Looking backward over five years reveals important distinctions. GDX experienced a maximum drawdown of -49.79%, while SIL suffered a steeper -56.79% decline from peak to trough. This 7-percentage-point gap reflects the heightened volatility inherent in silver mining stocks compared to their gold-focused counterparts.

The compounding effect becomes apparent when examining wealth accumulation: $1,000 invested in GDX five years prior would have grown to $2,379, outpacing SIL’s $1,857—a 28% performance advantage. This superiority stems from GDX’s lower volatility profile and more resilient large-cap positioning during market stress periods.

Both funds display beta values below market (0.87 and 0.90 respectively), indicating they amplify precious metals cycles while resisting broader equity market swings.

Why the Metals Markets Are Awakening

Silver has recently achieved all-time pricing highs, while gold maintains its upward trajectory as market sentiment shifts away from the artificial intelligence narrative that dominated equity performance. The divergence matters: silver functions as both an industrial metal and monetary store of value, creating dual demand drivers. Gold, though possessing limited industrial applications, strengthens during economic uncertainty and serves as inflation protection.

These qualities explain why precious metals mining stocks have outperformed the S&P 500 substantially over the trailing 12 months. Investors reconsidering their inflation hedges and seeking portfolio diversification have rotated capital toward this sector.

Critical Considerations for Mining-Focused Investing

It bears emphasis that both GDX and SIL represent mining company exposure rather than direct metals ownership. Mining equities carry operational risks distinct from commodity prices themselves—development costs, operational inefficiencies, geopolitical considerations, and financial management quality all influence performance independently from underlying gold or silver valuations.

This structural reality means that even during favorable metals price environments, individual mining companies may underperform due to execution issues or unfavorable cost dynamics.

Making Your Selection

For investors prioritizing cost efficiency, liquidity, and volatility mitigation, GDX’s larger asset base, lower expense ratio, and superior five-year risk-adjusted returns present a compelling case. The fund’s 56-company diversification reduces single-company idiosyncratic risk while maintaining pure precious metals mining exposure.

SIL appeals to investors with specific convictions about silver’s superior appreciation potential or those seeking higher dividend income. The fund’s concentrated approach magnifies both upside and downside, suitable for investors comfortable with amplified volatility in exchange for potential outsized gains during silver rallies.

Essential Definitions

ETF (Exchange-Traded Fund): Investment vehicles traded on public exchanges holding diversified asset baskets, typically stocks or bonds, offering single-ticker exposure to broad or narrow market segments.

Expense Ratio: The percentage of assets deducted annually to cover fund operations, directly impacting long-term returns through compound effect.

Assets Under Management (AUM): The aggregate market value of all investments supervised by a fund, reflecting investor confidence and trading liquidity.

Diversification: The portfolio construction strategy of spreading capital across multiple holdings to reduce concentration risk and volatility.

Dividend Yield: Annual distributions expressed as a percentage of current share price, providing income-generating returns independent of share appreciation.

Beta: The statistical measure quantifying an investment’s price sensitivity relative to market indices, with 1.0 representing identical market correlation.

Maximum Drawdown: The largest cumulative percentage decline from portfolio peak to subsequent trough, indicating worst-case loss scenarios.

Large-Cap Classification: Publicly-traded companies with market capitalizations exceeding $10 billion, typically offering greater liquidity and institutional participation.

Sector: Economically-grouped industries within markets, with precious metals mining constituting part of the broader basic materials sector.

Pure-Play Investment: Funds or companies providing singular industry or commodity exposure without diversification across unrelated sectors.

Risk-Adjusted Returns: Performance metrics evaluating investment gains relative to volatility endured, rather than absolute return figures alone.