Under the Spotlight: Global X Physical Silver ETF ($ETPMAG)

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A few months ago, investors were lining up along the streets of Sydney’s CBD to buy gold. The smarter trade might have been silver.

Silver has been one of the standout performers of 2025, surging roughly 147% and comfortably outpacing gold’s 64% gain over the same period. Just a few weeks into the new year and silver’s spot price is already up 27% YTD.

Aussie investors have followed the move. The Global X Physical Silver ETF ($ETPMAG) has been one of the most-traded products on Stake in recent weeks as silver pushed to fresh record highs, recently trading above US$90 an ounce.

Silver is benefiting from falling interest rate expectations, lingering geopolitical risk and renewed investor appetite for hard assets – a mix that’s pulled the metal firmly back into focus.

Why silver?

Like gold, silver thrives when uncertainty rises and interest rates fall. Right now, both boxes are ticked.

Geopolitical tensions in the Middle East, renewed trade friction under Donald Trump, and growing volatility across global markets have pushed investors toward safe haven assets. At the same time, falling rate expectations are making cash less attractive and sending money back into metals and equities.

But silver has a second engine powering this rally: industrial demand.

Silver is a critical ingredient in solar panels, EVs, circuit boards, electrical switches and advanced electronics. It’s one of the best conductors of electricity on the planet and increasingly hard to replace.

The metal is now in such demand, it was recently added to the US government’s list of critical minerals.

‘The market's finally taken notice that there's a deficit in silver,’ said John Ciampaglia, CEO of Sprott Asset Management. ‘You're starting to see shortages of silver emerge in the London market. [And] very low levels of silver in places like China.’

Solar panels have been the biggest driver. Demand for silver used in solar manufacturing has , accounting for nearly 40% of the electronics segment. Much of this silver cannot be recycled, meaning supply is permanently removed from the market.

At the same time, mining production has struggled to keep up. Global silver output fell around 7% over the same period, and last year marked the fifth consecutive annual silver deficit.

According to The Silver Institute, silver mining production is expected to peak in 2026 before declining, as several large mines approach the end of their operating lives.

How $ETPMAG works

There are plenty of ways to trade silver, but ETFs have become the cleanest entry point for most investors. For ASX investors, the choice is simple: $ETPMAG is the only pure play silver ETF in Australia.

Unlike many commodity-themed ETFs that rely on futures contracts, $ETPMAG is physically backed. When you buy units, the fund purchases and allocates physical silver on your behalf. If the silver price rises, the value of the ETF rises with it, and vice versa.

However, no ETF tracks the spot price perfectly. Small differences between the fund and the underlying asset are known as tracking error.

Over the past five years, $ETPMAG has recorded an average tracking error of 0.27%, which has narrowed to just 0.02% over the past year – a solid result for a single-commodity ETF.

In many cases, the ETF management fee (MER) is the biggest differentiator. The fund charges an annual fee of 0.49%, which is about average for Australian-listed ETFs, though higher than many Wall St alternatives.

Fast facts

• Index: LBMA London Silver Price (AUD)

• Management fee: 0.49%

• Funds under management: $1.55B

• Net inflows: around $380M in December

Mining momentum

Another way to invest in silver is through mining companies rather than the metal itself.

Mining stocks tend to behave like a leveraged play on the silver price. When silver rises, silver miners often outperform. But they can also fall faster when prices drop, thanks to operational risks, costs and balance-sheet pressures.

To date there are no pure-play silver mining ETFs on the ASX, but Wall St has more choice. The Global X Silver Miners ETF ($SIL) returned roughly 166% in 2025, compared with around 130% for Global X’s physical silver ETF.

$SIL holds major global miners including Wheaton Precious Metals ($WPM), Pan American Silver  ($PAAS) and Coeur Mining ($CDE), each up between 130% to 220% over the last 12 months.

For broader exposure, Australian investors can look to the BetaShares Energy Transition Metals ETF ($XMET), which tracks miners of copper, silver, lithium, uranium and other future-facing metals. It’s risen 118% over the past 12 months.

Or for diversification across metals themselves, there’s the Global X Physical Precious Metal Basket ($ETPMPM): up roughly 87% over the past year.

What's next?

Silver’s outlook still comes down to one simple equation: tight supply, rising demand.

Analysts are broadly bullish. With inventories low and the market heading into a sixth straight year of deficits, further upside seems likely. 

‘2025 was a banner year for metals, but it still feels like we’re in the early stages,’ Ciampaglia said.

Morgan Stanley sees gold and silver remaining supported into 2026 on safe-haven demand and global uncertainty. The bank points to easing interest rates, strong investor demand for defensive assets and ongoing geopolitical and inflation risks as key factors underpinning precious metals.

UBS now predicts silver could hit triple digits before the year is out – a feat many would think fantastical just a few months ago.

But timing commodity markets is difficult. Metals like silver can be volatile, and sharp pullbacks are common even in strong bull markets. Back in 2011, we saw Silver prices spike as high as $50 an ounce, only for the price to fall steadily for the next four years. The next time silver would reach that height was in 2025.

But with industrial demand rising, supply constrained and investor interest growing, the metal’s rally may have further room to run. 

This is not financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.