The ETF provides investors with broad exposure to smaller mining companies around the world. It owns shares of mining companies headquartered in the following countries:
- Canada: 55.5%
- U.S.: 31.6%
- Peru: 4.1%
- Sweden: 3.9%
- Poland: 2.8%
- Mexico: 1.6%
- Australia: 0.5%
Although the focus is on silver, many of these companies also mine other metals and basic materials. For example, First Majestic Silver is the purest silver producer in the industry, getting a peer-leading 57% of its revenue from silver and 90% from precious metals overall. Hecla Mining -- the largest silver producer in the U.S. and Canada and third-largest in the world -- is second-purest, at 44% of its revenue.
Meanwhile, the key difference between the Amplify Junior Silver Miners ETF and the Global X Silver Miners ETF is that the Amplify fund concentrates on smaller mining companies, whose small scale makes them riskier. Many early-stage exploration companies need outside capital to help develop their mines, increasing the risk of cost overruns or high debt burdens affecting their investment returns.
Given the risks, the Amplify Junior Silver Miners ETF is best for investors seeking a higher return potential. Investors are paying a reasonable fee for this upside opportunity, considering the ETF's relatively modest expense ratio of 0.69%.
Are silver ETFs right for you?
Silver ETFs allow anyone to easily add some silver market exposure to their portfolio. Physical silver ETFs are low-cost and highly liquid, making them potentially better options than owning coins and bars.
Similarly, silver mining ETFs provide benefits over investing directly in a single silver mining company by spreading the risk over dozens of silver stocks. These factors make silver ETFs a great way to start investing in silver for people who want exposure to the metal's investment properties or upside potential.
However, silver isn't for everyone. Investors need to firmly believe that its price will rise enough in the future to justify the risks of investing in the sector.
How to choose silver ETFs
Investors should evaluate several factors when choosing a silver ETF, including:
- Investment focus: Some silver ETFs focus on holding the physical metal, while others invest in silver mining companies.
- ETF Expense ratio: Investors need to consider whether an ETF's cost is in line with other funds.
- Assets under management (AUM): Larger silver ETFs are less susceptible to potential manipulation.
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