The Best Gold ETFs In Canada For 2023

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Dividend Earner

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Every investor think of investing in gold at some point in time. The challenge is not knowing how to invest in gold, or what to make of it as an investment.

Gold ETFs have particular characteristic that you need to be familiar with before you invest.

Why Invest in Gold?

It’s an important question as not all gold investments are equal just like investing in bonds. You can buy bullions (or bricks of gold if you are inclined), or ETFs, or gold mining stocks.

All of those investments are impacted by the price of gold.

The primary reason many invest in gold is because it is seen as a safe heaven during market turbulence and economic unknowns. It can, however, be scary to invest in gold.

So what do you want from a gold investment?

Do you want the physical gold bullions? Do you want a gold miner without understanding all the socioeconomic challenges that a miner could face? Or do you simply go for a Gold ETF?

Those are the 3 options available to get gold exposure. As it happens, you actually can use a Canadian Gold ETF to expose yourself to the physical gold or to the gold miners or to both. The options with gold ETFs are there.

While Exchange Traded-Funds (or ETFs for short) were introduced in the 1990’s, they have recently become a strong investment vehicles for many investors to avoid the abusive management fees of the mutual funds.

ETFs can provide a way to get exposed to gold if that’s of interest. Below are the Canadian gold ETFs you can pick from.

List of Canadian Gold ETFs

Here are the complete list of Canadian gold ETFs and their performance over the past 5 years. While they have a focus on gold, the performance is far from being equal.

I have excluded ETFs that invest in “future” derivatives as it falls outside of bullions and stocks and is more akin to trading a currency.

wdt_ID ETF Name Inception Company Assets
2 ZJG BMO Junior Gold Index ETF 19/01/2010 BMO Asset Management Gold Stocks
5 CGL IShares Gold Bullion ETF 28/05/2009 BlackRock Bullions
6 XGD IShares S&P/TSX Global Gold Index ETF 23/03/2001 BlackRock Gold Stocks
7 HGY Horizons Gold Yield ETF 17/12/2010 Horizons ETFs Management Gold Stocks
12 HEP Horizons Enhanced Income Gold Producers ETF 11/04/2011 Horizons ETFs Management Gold Stocks
13 KILO Purpose Gold Bullion Fund 29/10/2019 Purpose Investments Bullions
14 PHYS Sprott Physical Gold Trust 24/02/2010 Sprott Bullions
15 MNT The Canadian Gold Reserves exchange traded receipt 29/11/2011 Royal Canadian Mint Bullions
16 ZGD BMO Equal Weight Global Gold Index ETF 14/11/2012 BMO Asset Management Gold Stocks
17 CGXF CI First Asset Gold+ Giants Covered Call ETF 01/06/2011 CI First Asset Gold Stocks
18 HGGG Harvest Global Gold Giants Index ETF 07/01/2019 Harvest Portfolio Group Gold Stocks

While I do not have gold in my portfolio, gold has long been considered a defensive investment. Holding gold can put your mind at ease during poor market conditions, or market volatility. Another option is to hold bonds but it doesn’t have the same performance against inflation as some would say.

Obviously, no one can predict gold prices and your guess is as good as mine when it comes to how gold will be priced in the future but for now we can evaluate the various approach of the listed Canadian gold ETFs. 

Now, it’s important to separate the asset classes to compare apples to apples. As such you can see how the gold bullion ETFs do separately from the gold miners.

Best Gold Bullion ETF

The objective of the following ETFs is to replicate the performance of the price of gold bullion for investors, less expenses and fees. Many have a $USD option as well if desired.

wdt_ID ETF Yield MER Frequency Net Assets
1 PHYS 0.00 0.42 - 4,840M
5 KILO 0.00 0.20 Annual, if any 301M
7 CGL 0.00 0.55 Annual, if any 1,043M
10 MNT 0.00 0.35 - 659M

As one of the long standing ETF, if your interest is to invest in Gold, the PHYS ETF is the best Gold ETF to hold. It’s a true play on the gold value.

It stays closer to the gold value as you can see in the second graph where it’s all relative to gold prices. It is also the largest and is therefore easily traded.

This graph shows the ETF performance in relation to the gold value. You can see the variation up and down against gold as a flat line.

Best Gold Stocks ETF

The purpose of those ETFs is to primarily expose investors to gold stocks through various strategies. 

Investing in gold stocks is a proxy to gold. It’s not fluctuating solely based on the price of gold as the ETFs hold companies, and companies have to be well managed. This is about mining for gold for the most part and pricing against inventory (or future inventory).

While investing in gold bullions is like managing a currency, when investing in gold stocks you want to also pick the right account to do so. Be mindful the account where you hold your gold stocks, as opposed to your gold coins.

The best gold stocks ETF is the iShares S&P/TSX Global Gold Index ETF, or XGD ETF. It has the most assets and performs well.

wdt_ID ETF Yield MER Frequency Net Assets
1 HGY 4.96 1.09 Monthly 55M
5 HEP 5.28 0.84 Monthly 163M
7 ZJG 0.00 0.60 Annually 117M
8 XGD 0.22 0.61 Quarterly 1,479M
9 ZGD 0.00 0.62 Annually 240M
10 CGFX 0.00 0.65 Quarterly 453M
11 HGGG 0.00 0.40 Annually 9M

Psst … Did you see that the gold currency outperforms all of those ETFs? Maybe the gold buillion ETF is better.

Each of the ETFs will hold the various gold stocks traded on the Canadian and US exchanges.

Ticker Ticker Company Market Cap P/E Yield Aristocrat Graph SectorID IndustryID
NGT TSE:NGT Newmont 59.07 0.00 4.25 NO 1 1 46
ABX TSE:ABX Barrick Gold 38.72 475.50 2.47 YES 1 1 46
AEM TSE:AEM Agnico Eagle Mines 33.52 9.28 3.23 YES 1 1 46
FNV TSE:FNV Franco-Nevada Corp 30.69 32.92 1.16 YES 1 1 46
WPM TSE:WPM Wheaton Precious Metals Corp 28.98 39.56 1.28 YES 1 1 46
K TSE:K Kinross Gold 9.36 27.94 2.15 NO 1 1 46
YRI TSE:YRI Yamana Gold 7.57 21.87 2.03 NO 1 1 46
AGI TSE:AGI Alamos Gold 7.39 26.61 0.73 NO 1 1 46
BTO TSE:BTO B2Gold 5.38 11.85 5.27 NO 1 1 46
OR TSE:OR Osisko Gold Royalties 3.55 86.06 1.25 NO 1 1 46
CEE TSE:CEE Centamin PLC 1.79 17.04 3.50 NO 1 1 46
DPM TSE:DPM Dundee Precious Metals 1.75 7.81 2.29 NO 1 1 46
CG TSE:CG Centerra Gold 1.63 0.00 3.71 NO 1 1 46

How to Buy Gold ETFs

You can’t walk in a bank and buy a gold ETF. You can’t buy gold at the bank either.

The simplest way to buy a gold ETF is with a discount broker and preferably one with free ETFs such as Questrade so you pay no transaction fees but any discount broker will work.

If you decide a gold ETF isn’t for you, you can buy gold miner stocks with a discount broker.