Investors interested in gaining direct exposure to precious metals have two commonly considered options—the iShares Silver Trust (SLV) and the iShares Gold Trust (IAU). Both ETFs aim to mirror the spot prices of their respective underlying metals, silver and gold, allowing investors to diversify by including commodities in their portfolios. However, these funds differ significantly in terms of expense ratios, volatility metrics, recent performance results, and asset management scale.
The iShares Gold Trust (IAU) is known for its relatively low-cost structure, charging an expense ratio of 0.25%. On the other hand, the iShares Silver Trust (SLV) carries twice the expense ratio at 0.50%, which potentially impacts net returns for long-term investors. From a price volatility standpoint, SLV shows a beta of 0.38 relative to the S&P 500, signaling greater price fluctuation, whereas IAU's beta is lower at 0.09, suggesting it is comparatively more stable. Beta figures here are calculated using weekly returns over the past five years.
Examining returns over the trailing 12 months as of early February 2026, SLV outperformed IAU with a total return of 138.9%, compared to IAU's 73% return. These returns reflect total appreciation including price changes but exclude dividend payments, as neither fund distributes dividends. This highlights the growth-focused nature of these commodity trusts, which rely solely on the price movements of physical metals.
Asset size also distinguishes these ETFs. IAU manages approximately $78 billion, making it one of the largest commodity ETFs globally. It has a 21-year operational history offering investors substantial scale and liquidity. SLV manages around $47.3 billion in assets, maintaining significant scale but trailing IAU in size. The large asset base for IAU may appeal to investors prioritizing fund stability and trading liquidity.
Deepening the understanding of their holdings, IAU's portfolio is wholly dedicated to gold bullion. Due to sector mapping conventions, the fund appears classified 100% under real estate, although it functions strictly to track gold prices directly, reflecting pure metal exposure without holding any other asset type. Conversely, SLV's silver holdings map entirely to the basic materials sector and similarly consist of physical silver bullion. Both funds do not disclose individual holdings owing to their nature as single-asset trusts mapped to physical metals rather than equity shares. This structure provides clear and concentrated exposure to the metal prices without complicating factors.
Regarding portfolio growth, an investment of $1,000 held over five years in SLV would have appreciated to approximately $2,764, slightly outperforming the $2,672 growth observed with IAU. While this difference is modest, it reflects SLV's capacity for higher returns during the observed period, which may appeal to investors with greater tolerance for commodity price swings.
The past few months have exhibited notable price volatility in both markets. For example, IAU's price recently surged over 140% in a three-month timeframe before experiencing a sharp decline of about 36% at the start of February 2026. SLV displayed somewhat less extreme movement in the same period, rising roughly 34% and then falling nearly 14%. This recent volatility underscores the unpredictable nature of precious metals as asset classes and the importance of considering risk preferences when selecting between these ETFs.
For investors considering precious metals to diversify portfolios and hedge against inflationary pressures, both IAU and SLV represent reasonable options. The key consideration lies in the balance between cost efficiency and return potential. IAU's lower expense ratio makes it a compelling choice for those prioritizing cost control in their investment strategies. In contrast, SLV's higher returns despite its greater expense ratio may suit investors seeking enhanced growth opportunities and who are prepared to accommodate increased price volatility.
In conclusion, retail investors seeking exposure to precious metals should evaluate their overall portfolio composition and risk tolerance to select the ETF that best suits their investment objectives. More conservative investors aiming to safeguard purchasing power against inflation might prefer the gold-focused, lower-cost IAU. Conversely, investors inclined to accept heightened volatility for the possibility of superior returns may find SLV to be the more appropriate vehicle for silver exposure within their portfolios.
Note: This analysis excludes dividend considerations as neither ETF pays distributions, focusing solely on price appreciation and expense factors.