March 31, 2026
Commentary
The Ninepoint Silver Equities Fund experienced a volatile first quarter of 2026 against a backdrop of geopolitical uncertainty and changing interest rate expectations. On a quarter-to-date basis as of March 31, 2026, the Fund generated a total return of 3.16%, compared to the benchmark’s return of 5.03%.
NINEPOINT SILVER EQUITIES FUND - COMPOUNDED RETURNS¹ AS OF DECEMBER 31, 2025 (SERIES F NPP866) | INCEPTION DATE: FEBRUARY 29, 2012
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
INCEPTION |
|
|---|---|---|---|---|---|---|---|---|---|
FUND |
-26.08% |
3.16% |
3.16% |
40.77% |
167.74% |
46.92% |
19.29% |
18.41% |
6.98% |
INDEX |
-24.03% |
5.02% |
5.02% |
32.19% |
134.64% |
48.91% |
23.25% |
18.30% |
6.19% |
Silver prices continued the positive momentum from Q4 2025 into January, fueled by an improvement in investor demand and tariff-related dislocations in the physical market. The attraction of silver as an investment in late 2025 was partially supported by three consecutive Federal Reserve rate cuts, which lowered the opportunity cost for non-yielding assets, resulting in higher investor demand and ETFs inflow, accelerating price gains. The positive momentum continued into January when silver peaked at US$116/oz in late January following eight months of outperformance versus gold.
Following the strong start to the year, the precious metals complex, and especially silver, suffered a significant and quick correction in late January following the nomination of Kevin Warsh as the new Federal Reserve Chair, which the market interpreted as potentially a more hawkish Fed stance, with potentially fewer rate cuts. Following this significant correction, silver quickly stabilized and established a new, and much higher, trading range around US$80/oz for the rest of February.
On February 28th, the United States and Israel launched a coordinated, widespread military strike against Iran. This significant geopolitical event was initially shrugged off by the market but, by mid-March, it became clear that the conflict could have much wider geopolitical and economic consequences.
As the world watched the Strait of Hormuz grind to a halt and infrastructure destruction continued, the market quickly re-focused on the economic implications of higher energy prices and accessibility on the economy and monetary policy. As expectations of rate cuts evaporated, the USD strengthened and the general equity market corrected, bringing the precious metal sector down with it. Silver bottomed at $68/oz in late March before rebounding as the conflict in Iran began to show some hope of resolution. At the time of writing, the situation in the Middle East remains fluid and contradictory statements continue. A two-week ceasefire now creates a backdrop for further negotiations, and the precious metals sector, along with the general market, has rebounded in anticipation of a resolution.
While silver has been notably volatile in Q1 2026, the fundamentals for the metal remain compelling. Inventory levels at the LBMA and COMEX continue to trend lower as demand continues to grow.
We continue to believe that the market is slowly coming to terms with the fact that additional silver supply may not be forthcoming, despite the higher silver price environment. Existing producers have limited ability to increase production, while the few new projects which could be advanced continue to be impacted by uncertain permitting timelines.
Meanwhile, in Mexico, security concerns and geopolitical risk were heightened in Q1, and it is clear that operators in the region will need to increase security measures. At the same time, the Mexican permitting framework is slowly improving, which should ultimately help bring new and much-needed silver capacity.
We see Q1 2026 as a key FCF inflection point for silver producers, which could pleasantly surprise the market. Valuations remain attractive, with producers trading at roughly ~7x EBITDA and at discounts to their historical P/NAV average. With balance sheets strong, we believe the silver equity sector is well-positioned for further re-rating.
Our top contributors for the quarter included large-cap producer First Majestic Silver and US-based developer Hycroft Mining. The key detractors for the quarter were development-stage companies Vizsla Silver and Unico Silver. Vizsla Silver experienced a significant security incident, which dampened investor confidence and highlighted the inherent risks associated with development in Mexico. Unico Silver underperformed alongside the broader market correction.
Outlook and Investment Strategy
We see the current pull back as an entry point opportunity in a significant and multi-year silver bull cycle underpinned by a much stronger silver price environment.
Our investment focus remains on identifying quality producers, developers, and explorers in the silver space that are well-positioned to benefit from rising silver prices while minimizing operating and geopolitical risk in the Fund. The Fund remained positioned in both producers (~53%) as well as early-stage developers and explorers (~37%). We are putting incremental capital in the earlier-stage development and exploration names, which are starting to generate positive exploration and permitting news flow.
Nawojka Wachowiak, M.Sc., CIM
Ninepoint Partners