Gold vs Silver ETFs: IAU's Lower Fees Face SLV's 60% Rally

The iShares Gold Trust (IAU) and the iShares Silver Trust (SLV) both track spot metal prices without requiring a vault. The choice between them comes down to a fee gap, a volatility difference, and two very different recent return profiles.

IAU charges 0.25% annually. SLV costs 0.5% – double the fee. On a $10,000 position held for a decade, that means $250 in costs for the gold trust versus $500 for the silver one, assuming prices stay flat.

Silver is the more volatile metal. SLV's beta relative to the S&P 500 runs about 0.8, against IAU's 0.4. When equities swing, silver moves roughly twice as much as gold. That works in both directions – bigger gains in rallies, deeper losses in selloffs.

Returns over the past year favor silver heavily. SLV returned nearly 60% over the trailing 12 months. IAU returned 22.2%. Silver's run has two drivers: a safe-haven bid that lifted gold as well, plus industrial demand from solar panel manufacturing and electronics. Gold has more than doubled over two years. Silver has nearly tripled since the start of 2025.

Over longer periods the gap narrows. On an annualized basis over three years, SLV returned 32.7% against IAU's 27.9%. Over five years both sit around 17%. Over 10 years IAU edges ahead at 11.5% versus SLV's 10.6%. The fee differential and silver's periodic drawdowns explain the convergence.

Tax treatment is the same for both, and it is a shared drawback. U.S. investors pay collectibles tax rates on these trusts. Long-term gains cap at 28%, compared with 20% on most stock profits. Short-term gains are taxed as ordinary income, which can exceed 37% for high earners.

Both funds hold physical metal directly. IAU's sole asset is gold bullion. SLV holds silver bullion. Neither uses futures or derivatives, so tracking error is minimal. The trusts launched in 2005 and 2006 respectively. Each has billions in assets under management.

AlphaScala's proprietary scoring assigns IAU a score of 19 out of 100, labeled Weak. SLV scores 29 out of 100, also Weak. The silver trust's higher volatility and recent outperformance push its score slightly higher, though neither fund ranks well on risk-adjusted returns over the trailing period.

Gold's case going forward rests on two factors: persistent inflation from higher energy costs tied to the Iran conflict, and continued central bank purchases as reserve managers diversify away from the dollar. Both trends could keep investor demand for IAU elevated. Silver's industrial exposure adds a growth component, ties its fate to global manufacturing cycles.

For investors weighing the two, the cost advantage and lower volatility favor IAU for a core holding. SLV suits those who want more upside leverage and can tolerate the fee and the tax hit. The choice depends on whether the portfolio needs stability or a tactical bet on industrial demand.

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