With the 2026 precious metals boom showing signs of slowing, investors are rethinking their strategies, especially regarding whether to back physical silver or gold mining equities. Silver soared in 2025, but early 2026 has brought sharp declines. The iShares Silver Trust (NYSEMKT:SLV) has dropped 20% so far this year, while the VanEck Gold Miners ETF (NYSEMKT:GDX), which focuses on mining stocks, has only fallen 13.7% during the same period.
Silver's Meteoric Rise in 2025, Followed by a Sharp U-Turn
The year 2025 marked a record for silver prices. The iShares Silver Trust gained 150% over that period, driven by rising gold prices and increased industrial demand, especially in renewable energy. That rapid climb came with a price: a correction in 2026. As traders took profits, silver prices dipped, pushing SLV down 20% as of mid-2026.
Silver's Volatility
Before 2025, the trust had endured a mixed track record. Out of the previous four years, two had negative returns, underscoring how volatile direct silver investments can be. While physical silver is straightforward and tangible, its price can swing sharply, making it a risky option for some investors.
The VanEck Gold Miners ETF offers a different kind of exposure. Instead of storing silver, it owns shares in major mining companies such as Newmont Corp and Barrick Gold. This approach often delivers smoother returns. Over the past three years, the fund has averaged annual gains of 34.8%, and it has posted 17.9% growth over five years. This goes beyond just tracking gold prices, as mining firms can also enhance shareholder returns through dividends, buybacks, or corporate actions like mergers.
GDX has outperformed SLV in the early part of 2026, slipping 13.7% year-to-date. Still, it aligns with its long-term performance and has the added benefit of a dividend, which SLV cannot offer. This dividend plus the adaptability of equity investing makes GDX an appealing option for investors with a long-term outlook.
The iShares Silver Trust charges an expense ratio of 0.5%, just slightly lower than VanEck's 0.51%. While the fee difference is minor, it reflects the different operational costs of holding physical silver versus managing a basket of stocks. But there's another factor for U.S. investors: taxation. Earnings from physical silver are often taxed at the collectibles rate, which is generally higher than capital gains tax on stocks.
Mining stocks, as held in GDX, offer more straightforward tax implications and room for growth beyond just gold prices. Corporate strategies like mergers, buybacks, and dividend hikes can improve returns even when gold prices are flat. This corporate flexibility is a major benefit for equity-based funds like GDX.
GDX Composition and Strategy
The iShares Silver Trust is a commodity-based fund that holds its assets in physical silver bullion. Unlike VanEck’s Gold Miners ETF, which has 57 different positions in the gold mining sector, the iShares Silver Trust is entirely concentrated in silver. This makes it a pure-play option for investors who want direct exposure to the metal without the influence of operational or market risks from individual companies.
The VanEck Gold Miners ETF, on the other hand, tracks the MarketVector Global Gold Miners Index. It includes top performers like Newmont Corp at 10.5%, Agnico Eagle Mines Ltd at 10.2%, and Barrick Mining Corp at 8%. These companies account for over 28% of the fund's total holdings, offering a mix of large and mid-sized players in the gold mining sector. Its structure gives investors access to a diversified pool of companies, each with different operational and geographic exposure.
Both ETFs have existed since 2006, providing a long track record for investors to analyze. Over the trailing 12-month period, the iShares Silver Trust delivered significantly higher total returns, but this comes at the cost of greater volatility. For example, SLV has historically experienced a deeper maximum drawdown compared to GDX. This means that during downturns, investors in physical silver may face steeper losses than those in gold mining equities.
For investors interested in the long-term performance of both assets, it’s worth noting that GDX has delivered annualized returns of 34.8% over the past three years, 17.9% over five years, and 10.4% over 10 years. Similarly, the iShares Silver Trust has generated roughly comparable returns in these timeframes. However, the nature of those returns is different. While SLV reflects the raw price of silver, GDX captures the performance of companies involved in mining and extracting gold, adding another layer of complexity and potential reward.
In the end, the decision between SLV and GDX depends on an investor's risk tolerance, investment horizon, and preference for physical commodities or corporate equity. For those seeking a more stable, income-producing option, GDX offers a dividend yield that SLV cannot. At the same time, for those who prioritize direct exposure to the price of the metal itself, SLV remains a compelling option—despite its inherent volatility.