Silver has emerged as one of the biggest wealth creators of 2025. A sharp rally in physical silver prices also helped silver ETFs (exchange-traded funds) post whopping gains, comfortably beating gold ETFs and even equities across short, medium and one-year timeframes.
Physical silver prices have jumped by around 160% this year, rising from USD 29.24 per ounce on December 31, 2024 to about USD 76 per ounce as 2025 nears its close. This sharp rise in the underlying metal has directly reflected in silver ETFs, which also gained about 153% in 1 year.
An analysis of 31 silver ETFs, sourced from Value Research, shows how powerful this rally in silver ETFs has been. Among them, HDFC Silver ETF has delivered a return of about 157% over the last one year. Overall, one-year returns across silver ETFs range between 143% and 157%, highlighting how broad-based the surge has been across the category.
Strong gains across short and medium-term periods
Silver ETFs have not only done well over one year but have also posted eye-catching returns over shorter and medium-term horizons.
In the last 3 months, silver ETFs have surged by up to 66%. Over 6 months, returns for silver ETFs have been in the range of 100% to 110%, underlining how quickly momentum built up.
Over 3 years, silver ETFs have delivered returns of up to 48%, with the category average around 46%, showing that gains are not limited only to the recent rally.
Put together, silver and silver ETFs have arguably emerged as the best-performing investment tools across short-term (3 and 6 months), medium-term (1 year), and even longer horizons like 3 years, outshining many popular alternatives such as equities, gold, and equity mutual funds.
Pure silver ETFs vs fund of funds (FoFs)
Out of the 31 silver schemes analysed, 17 are pure ETFs and 14 are fund of funds (FoFs).
Pure silver ETFs invest directly in physical silver or silver-linked instruments and are traded on stock exchanges like shares. Their performance closely mirrors spot silver prices, but investors need a demat and trading account to invest.
Silver FoFs, on the other hand, invest in underlying silver ETFs. These can be bought like regular mutual funds without a demat account, making them more accessible for many retail investors. Performance-wise, both aim to track silver prices, though pure ETFs tend to mirror price movements more directly.
Silver ETFs vs gold ETFs: A clear outperformance
When silver ETFs are compared with gold ETFs across different timeframes, the gap becomes very clear.
Silver ETFs Vs Gold ETFs: 3 months
Gold ETFs: 22.34%
Silver ETFs: 63.38%
Silver outperformed gold by over 41 percentage points, delivering nearly 2.8 times the return.
Silver ETFs Vs Gold ETFs: 6 months
Gold ETFs: around 41%
Silver ETFs: around 110%
Silver once again delivered far superior gains over this period.
Silver ETFs Vs Gold ETFs: 1 year
Gold ETFs: 79.43%
Silver ETFs: 152.95%
Silver returned almost 1.9 times what gold delivered in one year.
Silver ETFs Vs Gold ETFs: 3 years
Gold ETFs: 34.74%
Silver ETFs: 44.51%
Silver again emerged as the better option for ETF investors.
It is important to note that 5-year and 10-year return data for silver ETFs is not available, which makes long-term comparisons more difficult. Gold ETFs, on the other hand, have a longer performance history, helping investors assess stability over extended periods.
How silver compares with equities and equity mutual funds
To put silver’s performance in perspective, it also helps to look at returns from equities, which are often considered the highest return-generating asset class among traditional investments. Over the last one year, benchmark indices have delivered relatively modest gains: Sensex gave about 8.24% and Nifty delivered about 9.72%.
Against these numbers, silver ETFs, with returns of over 150% in the same period, stand out sharply, highlighting how exceptional 2025 has been for silver-focused investments.
Why silver prices surged in 2025
Silver’s rally in 2025 was driven by a combination of powerful global factors. Prices surged sharply amid a structural supply deficit, where demand consistently outpaced supply.
Industrial demand rose strongly, especially from green energy sectors such as solar panels and electric vehicles, where silver plays a critical role. Expectations of US interest rate cuts also supported precious metals, while rising global uncertainty pushed investors toward silver as a safe-haven asset alongside gold.
What investors should take away
Silver ETFs have clearly delivered much stronger short-term and medium-term gains than gold ETFs and equities, but this performance comes with higher volatility and sensitivity to economic cycles and industrial demand. Gold, while lagging silver in returns, continues to offer a relatively steadier profile and has longer-term performance data to assess stability.
For investors, the 2025 rally reinforces one key lesson: while silver can deliver outsized returns during favourable phases, it is best approached with an understanding of its sharper ups and downs, and ideally as part of a diversified portfolio rather than a standalone bet.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.