Hi there,
It really all depends on what you are trying to accomplish. KILO.TO is a pure-play on bullion - it holds the actual metal. Given this, its performance will be tied to the price of the precious metal. There are other ETFs out there - name those that track producers. Here is quick breakdown of the types of gold ETFs:
- Bullion ETFs (Like KILO) - track the price of the metal. Defensive in nature, and will do well when there exists economic uncertainty. You can also get some that are hedged to the US or CAD - this will add extra protection (or risk) against dollar movements.
- Index ETFs - These track the entire industry and are built to track the performance of the Indexes which includes producers, streamers, and companies of all sizes. This will also do well in a Gold bull market, and can also be considered a defensive play. On the flip side, in a gold bear market - it will likely drop more than a bullion ETF. XGD.TO is a good example here.
- Income focused ETFs - Built to provide income to investors - you will see some of the most reliable dividend payers in the industry here. Likely to be littered with large cap and streamers. Good example here is HEP.TO. Once again - expect similar performance to Index ETFs, although are likely to be less volatile.
- Junior focused ETFs - These track the smaller industry players. Those that are still in exploration and development stages, or very early in production. These ETFs will be the most volatile and are not for the defensive investor. Expect considerable outpeformance in a gold bull run and it to underperform in a big way in a gold bear market.
If you want additional information - Have a look here: https://www.stocktrades.ca/canadian-gold-etfs/
Bottom line, which you choose will be dependent on your risk profile and outlook on gold. All will do well in a gold bull run, and all will struggle in a gold bear market. However, they will do so to varying degrees. From the most defensive (gold bullion ETF) to the most aggressive (junior focused ETF) investor. Hope the way I've explained this makes sense.
We are strong believers in having exposure to gold regardless of market conditions. As we've seen in 2020, gold make for an excellent hedge against uncertainty and volatility.
Mat