It is a thematic ETF that tracks the Solactive Global Silver Miners Index. It invests most of its assets in the index constituents and depositary receipts, so it captures the share price movements of the global silver mining industry as a whole.

It suits investors who want to ride the silver cycle through equities rather than physical silver or futures, and who can tolerate commodity volatility.

It is a passively managed (index-tracking) ETF run by Global X.

The fund selects global listed companies with a large share of silver mining and refining operations and holds them in line with their index weights. Because it does not buy physical silver directly, there are no storage costs or futures rollover burdens. In exchange, the production costs and management performance of individual mining companies are mixed into the returns.

• Access to the silver cycle through stocks, with no physical storage or futures rollover
• Large weighting in overseas miners in Canada, Latin America and elsewhere, resulting in substantial exposure outside the US
• The leveraged nature of mining stocks, whose share prices react more strongly than the silver price itself

Assets under management (AUM) are $3.9B, and the expense ratio is 0.65% per year.

Silver miners have relatively fixed production costs while their selling prices follow the silver market, so profits tend to grow by a larger margin when silver prices rise.

Performance swings widely depending on precious metal prices and mining company earnings. Interest rates, the dollar and industrial silver demand all act at the same time, so there are often periods when the direction does not run one way.

Money tends to flow into precious metal mining ETFs when safe-haven demand strengthens or inflation worries grow. Conversely, when risk appetite revives, money repeatedly leaves them quickly.

Its strength is that it lets you ride the silver cycle through stocks, while its burdens are concentration in a small number of holdings and high volatility.

GDX and GDXJ, shown in the table, focus on gold mining companies, so they follow the gold cycle rather than silver. SILJ has the same silver mining theme but a higher weighting in small and mid-sized miners, which makes it more volatile. COPX, URA and similar products cover other resources, namely copper and uranium, so it makes sense to compare them only in terms of fund size and expense ratio. If you want physical silver itself, SLV is an alternative; for 2x exposure to the silver price, AGQ; and for physical gold, GLD.

These are the items to check before buying this ETF. The silver price itself and the share prices of mining companies move differently, so you should first be clear about what you are betting on. Please also review your holding period and the size of drawdown you can tolerate.

When silver prices fall, mining company profits shrink quickly, and share price declines become deeper than the drop in silver itself. Concentration in a small number of holdings and the policy and currency risks of overseas mines also come into play.

This product suits investors who want to approach the silver cycle through stocks. If you want to follow the silver price itself, compare it with a physical product such as SLV, and if you want gold exposure, consider options such as GDX alongside it.