Invest in gold - Stocktrades Canada

Instead of buying gold mining company stock, I prefer invest in equity close to gold price movement. In Canada I learn that you may choose ETF iShare Gold Bullion, but there is one hedged and one non-hedged, what is the difference? How to consider pros and cons? What about invest in MNT-T (ETR under Royal Canadian Mint) ?

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Asked on March 20, 2022 1:10 pm

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Hey there,

Hedged products use derivates to limit the volatility associated with currency fluctuations between the CAD and USD. Unhedged doesn't, and would thus be subject to currency fluctuations. So if you want stability, the hedged version is the way to go.

MNT ETRs (exchange traded receipts) gives you access to invest directly in physical gold. Each ETR effectively represents an interest in gold bullion held in custody by the MINT. The ETR charges a 0.35% annual fee vs 0.55 for CGL. If one compares the returns between MNT and CGL - they track each other quite closely over the past 3 and 5 year periods and both have slight periods of outperformance, but nothing major. . The biggest difference is that CGL is far more liquid than MNT.

Mat

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Posted by Mathieu Litalien

Answered on March 21, 2022 5:24 am

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