Precious Metals ETF Guide: Top Funds for Gold and Silver

In today’s economic climate of rising inflation, currency devaluation, and geopolitical instability, many investors are turning to precious metals as a hedge. 

While physical bullion is often seen as the "purest" form of investment, precious metals ETFs (exchange-traded funds) offer a more accessible way to gain exposure to gold, silver, platinum, and palladium.

But how do these ETFs work? What are their pros and cons? And are they a smart choice compared to physical bullion or other precious metal investments like gold IRAs?

Let’s dive into the details.

What Is a Precious Metals ETF?

A precious metals ETF is a financial instrument that tracks the price of one or more precious metals. These funds are structured similarly to mutual funds but are traded like stocks on public exchanges.

When you buy shares in a precious metals ETF, you're gaining exposure to the price movements of metals like gold or silver without actually owning the physical commodity.

Some ETFs are backed by physical metal held in vaults (e.g., GLD for gold, SLV for silver), while others invest in mining companies or derivatives contracts.

Why Some Investors Say ETFs Are Just "Paper Gold"

Among hardcore bullion investors, the term "paper gold" is often used dismissively to describe ETFs and similar financial instruments. Critics argue that ETFs don't represent true ownership of metal and can distort the natural supply-and-demand dynamics of the physical market.

They're not wrong. The paper gold market introduces counterparty risk, potential regulatory issues, and a disconnect from the tangible asset that gold and silver are valued for.

However, ETFs also bring something vital to the market: liquidity. Without the scale of paper markets, precious metals might be more volatile and less accessible. ETFs play a major role in price discovery and overall market stability.

Who Should Invest in Precious Metals ETFs?

Precious metals ETFs appeal to a wide range of investors:

• Institutional investors who need liquidity and diversification
• Everyday investors who want portfolio exposure without physical storage
• Stock market participants who are comfortable with shares but want metals exposure

If you're okay with stock market risk and don’t mind not physically owning your gold, ETFs might be a great fit.

Key Factors to Consider When Evaluating a Metals ETF

Before investing, here are essential questions to ask:

• Is it physically backed?
• Who is the custodian? (e.g., JPMorgan, HSBC, BNY Mellon)
• What’s the expense ratio?
• Can you redeem it for physical metal?
• Does it trade at a premium or discount to NAV?
• How closely does it track the spot price?
• How liquid is it? (average daily volume)

Let’s look at some of the most widely held ETFs in the market today.

Top Precious Metals ETFs (Physically Backed)

SPDR Gold Shares (GLD)

• Ticker: GLD
• AUM: Approximately $102.23 billion (as of May 6, 2025)
• Expense Ratio: 0.40%
• Custodian: HSBC
• Structure: Physically backed grantor trust

GLD is the most popular gold ETF and often used as a benchmark. It offers high liquidity and tightly tracks the gold spot price.

iShares Silver Trust (SLV)

• Ticker: SLV
• AUM: Approximately $14.75 billion (as of May 7, 2025)
• Expense Ratio: 0.50%
• Custodian: JPMorgan
• Structure: Physically backed grantor trust

SLV is the go-to silver ETF. It's backed by silver bullion and gives retail investors a low-barrier way to gain exposure to silver without storage hassles.

Sprott Physical Gold Trust (PHYS) and Silver Trust (PSLV)

• Tickers: PHYS, PSLV
• AUM: PHYS: ~$12.13B, PSLV: ~$6.15B (May 2025)
• Expense Ratios: PHYS: 0.41%, PSLV: 0.58%
• Custodian: RBC Investor Services
• Structure: Closed-end trust with redeemable physical metal under certain conditions

PHYS and PSLV are favored by gold bugs who value redeemability and transparency. These funds publish bar lists and undergo regular audits.

abrdn Physical Platinum Shares ETF (PPLT)

• Ticker: PPLT
• AUM: ~$1.01 billion (May 2025)
• Expense Ratio: 0.60%
• Custodian: ICBC Standard
• Structure: Physically backed ETF

abrdn Physical Palladium Shares ETF (PALL)

• Ticker: PALL
• AUM: ~$338.2 million (May 2025)
• Expense Ratio: 0.60%
• Custodian: ICBC Standard
• Structure: Physically backed ETF

ETFs That Invest in Mining Stocks

iShares MSCI Global Gold Miners ETF (RING)

• Ticker: RING
• AUM: ~$1.46 billion
• Expense Ratio: 0.39%
• Top Holdings: Newmont, Barrick, Agnico Eagle, Anglogold Ashanti, Newcrest

RING is well-suited for those wanting to profit from mining companies without going through the hassle of picking out individual miners.

iShares MSCI Global Silver & Metals Miners ETF (SLVP)

• Ticker: SLVP
• AUM: ~$267.9 million
• Expense Ratio: 0.39%

SLVP includes about 32 companies in its portfolio and has a broader exposure to metals miners beyond just silver. It may diverge from spot silver performance.

The Downside of Precious Metals ETFs

Despite their convenience, ETFs aren’t without risks:

• Counterparty Risk: You don’t own metal directly—you own fund shares.
• No Physical Access: Most ETFs don’t allow redemption in metal.
• Fees: Annual fees can erode returns over time.
• Tracking Error: Some ETFs slightly lag spot prices.
• Tax Treatment: Many ETFs are taxed as collectibles (28% capital gains rate).

Physical Bullion or Gold IRA: The Alternative

If you're drawn to gold for its role as a hard asset, why not own it directly?

Gold IRAs let you hold physical gold or silver in a tax-advantaged retirement account. Benefits include:

• Direct ownership of real metal
• IRS-approved depositories for secure storage
• Eligibility for physical delivery upon distribution
• Hedge against inflation and market crashes

Top Gold IRA companies include:

• GoldenCrest Metals
• Augusta Precious Metals
• Birch Gold Group
• Noble Gold Investments

These companies can guide you through the rollover process and help you choose bullion that suits your goals. Some even waive storage fees for up to 5 years.

Precious Metals ETFs: Worth It?

Precious metals ETFs offer a simple and cost-effective way to get exposure to gold, silver, platinum, or palladium without dealing with physical storage or security. For many investors, they're a great starting point.

However, they aren’t without trade-offs. If your goal is long-term wealth preservation or to 'crisis-proof' your savings, physical bullion or a gold IRA may be a better fit.

Whatever you choose, make sure to do your due diligence. And consult with a financial advisor to ensure your precious metals strategy aligns with your overall portfolio and retirement goals.