iShares Silver Trust ETF Is Good but Try Mining Stocks as Well

Includes: BVN, CDE, HL, PAAS, SLV, WPM
by: NakedValue

The iShares Silver Trust ETF (NYSEARCA:SLV) is quickly becoming one of the market's hottest ETFs. But investors should know that silver mining stocks are also a good way to bet on the price of silver. While this may seem hardly novel, miners aren't always good substitutes for the assets that they mine. For example, factors like managerial decisions and capital structure issues can seriously distort the relationship between the mined products and the miners.


Here is a graph of the cumulative returns of iShares Silver Trust ETF and silver miner stocks since Ben Bernanke's Jackson Hole speech. Based on the graph, we can see that the popular ETF returned 114%

(Click to enlarge)


Since Bernanke unofficially signaled the start of QE2 with his Jackson Hole speech, the following miners have tracked SLV relatively well:

  • Pan American Silver (NASDAQ:PAAS)
  • Coeur d'Alene Mines (NYSE:CDE)
  • Hecla Mining (NYSE:HL)
  • Silver Wheaton (SLW)


Not all miners are the same. While Compania de Minas Buenaventura SA (NYSE:BVN) mines silver, they have been a poor choice as a silver proxy.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.