Silver Edition 2012: Battle Metals vs. Miners (SLV, SIL, SLW, PAAS, AG, FRES)

Daniela Pylypczak: For the most part, silver has had a rather impressive yet volatile year. Often overshadowed by its golden competitor, this shiny metal has been able to gain some significant traction over the last four months to make up for its summer dip. And as such, two popular exchange-traded funds have rewarded those investors patient enough to ride out the swings: iShares’ Silver Trust (NYSEARCA:SLV) and Global X’s Silver Miner ETF (NYSEARCA:SIL). Though each fund takes a vastly different approach to the silver market, a close look at their performance on a year-to-date basis shows why these two picks are among investor’s top choices:

2012 Trend: Gaps Between Metals And Miners

In almost all precious metal categories, significant gaps in performances between spot prices and commodity producers have become commonplace in 2012. Though many miners have benefited from the general rise in metal prices, the boost has not been enough to compensate the painfully high operational costs:


SLV Comes Out On Top

The iShares’ Silver Trust (SLV), which is designed to track the spot price of silver bullion, has fared relatively well this year considering the underlying asset’s inherent volatility. As of December 18, 2012, SLV has gained over 15.8% year-to-date and roughly 12% over the trailing 26-week period. In the last two months, however, spot prices have taken a small downturn, though no significant downward trend has been indicated.

In terms of assets, SLV has seen over $340 million in net inflows, making the fund’s grand total of assets under management an impressive $10.3 billion and counting.

SIL Takes A Close Second Place

This popular fund allows investors to put an equity spin on the silver space, targeting some of the top names in the silver mining industry. SIL’s portfolio consists of roughly 35 individual holdings, with nearly three-quarters of total assets allocated to the top ten holdings, including Fresnillo PLC (LON:FRES), Silver Wheaton (NYSE:SLW), Pan American Silver (NASDAQ:PAAS) and First Majestic Silver (NYSE:AG) [see also Jim Rogers: Silver Is a Better Investment Than Gold].

Year-to-date, SIL has gained just over 9.3%, though over the trailing 26-week period the fund has popped 15.8%. SIL has performed slightly better than SLV in recent months, managing to post meager but positive returns. Though not as impressive as SLV’s inflows, SIL has been able to attract over $31.5 million in assets in 2012. As of December 18, 2012, SIL boasted total assets of over $374 million and an average daily trading volume of roughly 303,000 shares.

Written By Daniela Pylypczak From CommodityHQ  Disclosure: No Positions.

CommodityHQ offers educational content, analysis, and commentary on global commodity markets. Whether you’re looking to speculate on a short-term jump in crude or establish a long-term allocation to natural resources, CommodityHQ has the information you need.

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