The Best Canadian Gold ETFs

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.

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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_IDETFNameInceptionCompanyAssets
2ZJGBMO Junior Gold Index ETF19/01/2010BMO Asset ManagementGold Stocks
5CGLIShares Gold Bullion ETF28/05/2009BlackRockBullions
6XGDIShares S&P/TSX Global Gold Index ETF23/03/2001BlackRockGold Stocks
7HGYHorizons Gold Yield ETF17/12/2010Horizons ETFs ManagementGold Stocks
12HEPHorizons Enhanced Income Gold Producers ETF11/04/2011Horizons ETFs ManagementGold Stocks
13KILOPurpose Gold Bullion Fund29/10/2019Purpose InvestmentsBullions
14PHYS Sprott Physical Gold Trust24/02/2010SprottBullions
15MNTThe Canadian Gold Reserves exchange traded receipt29/11/2011Royal Canadian MintBullions
16ZGDBMO Equal Weight Global Gold Index ETF14/11/2012BMO Asset ManagementGold Stocks
17CGXFCI First Asset Gold+ Giants Covered Call ETF01/06/2011CI First AssetGold 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_IDETFYieldMERFrequencyNet Assets
1PHYS0.000.42-4,840M
5KILO0.000.20Annual, if any301M
7CGL0.000.55Annual, if any1,043M
10MNT0.000.35-659M

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).

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_IDETFYieldMERFrequencyNet Assets
1HGY4.961.09Monthly55M
5HEP5.280.84Monthly163M
7ZJG0.000.60Annually117M
8XGD0.220.61Quarterly1,479M
9ZGD0.000.62Annually240M
10CGFX0.000.65Quarterly453M
11HGGG0.000.40Annually9M

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.

TickerKeyTickerCompanySectorIndustryScoreQuoteMarket CapP/EFPEEPSYield RawYieldPayoutRatioPaymentsDividendChowderGrowthRatingIncomeRatingTollboothAmbassadorAchieverAristocratKingCountryGraph
TSE:NGTNGTNewmontBasic MaterialsGold0.3078.2162.600.000.004.450.03513.511.000042.200.035123IntermediateNONONONOCanada1
TSE:ABXABXBarrick GoldBasic MaterialsGold0.4527.1648.3015.7315.731.640.01651.650.237040.360.016525IntermediateNONONONOCanada1
TSE:FNVFNVFranco-Nevada CorpBasic MaterialsGold0.45199.5538.1251.3051.303.790.00750.750.335041.200.049764IntermediateYESYESYESNOCanada1
TSE:WPMWPMWheaton Precious Metals CorpBasic MaterialsGold0.4757.6325.9436.2436.241.590.01211.210.352040.560.095853IntermediateNONOYESNOCanada1
TSE:AEMAEMAgnico Eagle MinesBasic MaterialsGold0.6380.7119.6720.9820.983.580.02162.160.402041.400.202675IntermediateNONOYESNOCanada1
TSE:BTOBTOB2GoldBasic MaterialsGold0.505.235.506.836.830.630.03823.820.229040.160.038245IntermediateNONONONOCanada1
TSE:YRIYRIYamana GoldBasic MaterialsGold0.385.595.4025.3025.300.450.02352.350.550040.110.035314IntermediateNONONONOCanada1
TSE:AGIAGIAlamos GoldBasic MaterialsGold0.2810.143.98143.65143.650.670.01231.230.247040.100.025731IntermediateNONONONOCanada1
TSE:OROROsisko Gold RoyaltiesBasic MaterialsGold0.3517.012.8569.0169.010.320.01181.180.818040.200.047542IntermediateNONONONOCanada1

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.

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DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.