Mining ETFs Canada

  If you are looking for something that can diversify your portfolio, gold mining, ETFs might be what you’re looking for to help you out. In addition, this type of exchange-traded fund, or ETF, can hedge out inflation and any risks in currency. Finally, gold is an alternative investment option not usually associated with the stock markets when extreme uncertainty occurs.

            Because of mining ETFs, investors are now making their way to financial markets, piling up gold and increasing its prices amidst the overall market’s negative territory. This event makes gold a volatile asset. Hence, you should be extra careful with your portfolio because it can be over-exposed, go beyond its security and comfort zone, and be seen from a risk-tolerant perspective.

            Buying physical gold bullion, gold stocks, and gold derivatives of some inclusions on how you can gain exposure with a brokerage account when you purchase a gold ETF. Now, let’s discuss some of the best gold mining ETFs available for purchase in the Canadian market this 2021.

Golden Rule First – What are Gold Mining ETFs?

            In the exchange-traded fund industry, a gold ETF invests both ways – one is in gold itself, or the metal or commodity and tracks its price range; the other is by investing in companies that mine gold themselves. In some other cases, even gold futures and other gold derivatives tied to the value of this precious metal can become investment options for some.

            Much like how stocks are traded in the stocks exchange scene, gold ETFs provide a similar experience to investors together with accessibility to this high-valued metal without the need of having the physical gold bullion with them, such as coins, bars, or jewelry. And because of their liquid properties, the hassles of security and storage will never be an issue, making buying and selling transactions easier than others. So, investors that invest in gold stock baskets are given diversification with the potential to be a less volatile commodity, unlike purchasing individual companies that handle gold mining.

Best Canadian Mining ETFs

            Now that we know the basics about gold mining ETFs, let us now look at some of the best and the most popular ones in Canada:

(Note: These ETFs are listed in alphabetical and follow no other kind of order.)

  1. BMO Equal Weight Global Gold Index ETF

            With the Soloactive Equal Weight Global Gold Index tracking, ZGD seeks to improve its net expenses through gold mining equity investments. Across the board, its stocks are all weighted-approximately equals, some of which include B2Gold, Dundee Precious Metals, Endeavour Mining Corp, Franco Nevada, K92 Mining, Kinross Gold, Wesdome Gold Mines, and 28 others – holding a total of 35 mining stocks. These stocks are scattered globally, mainly in the U.S., Canada, and South Africa, in Australia, Brazil, Burkina Faso, Ivory Coast, Kyrgyzstan, Tanzania, and Turkey. With a “high” risk rating, ZGD is considered eligible for registered and non-registered investment accounts.

  1. BMO Junior Gold Index ETF

            As it tries to replicate its net fees performance in the Dow Jones North America Select Junior Gold Index, ZJG holds junior gold mining stocks as valued investments. As a result, it has 38 stocks with a “high” risk rating. Five of its top holdings are as follows, but in random order: B2Gold Corp, Endeavor Mining Corp, Royal Gold Inc., Ssr Mining Inc., and Yamana Gold Inc., respectively.

  1. CI First Assets Gold+ Giants Covered Call ETF

            If you are an investor looking for portfolio growth while earning income all at once, then CGXF might be the perfect gold mining ETF option for you. In North America, this fund holds and invests in 15+ stocks, some of which are the most prominent gold and precious metals companies. With its 30 security holdings that cover call options and minimize risks in their portfolio, CGXF’s five (5) top holdings include Sibanye Stillwater Ltd (7.10%); Royal Gold Inc. (6.99%); Franco-Nevada Corp (6.91%); B2Gold Corp (6.84%), and; Endeavour Mining Corp (6.80%). In addition, it makes applicable quarterly distributions and is a registered- and non-registered-account eligible.

  1. Horizons Gold ETF

            HUG, or the Horizons Gold ETF, is committed to reproducing the performance it has of its net fees, distributions, and expenses from the Soloactive Gold Front Month MD Rolling Futures Index ER. True to its acronym, HUG gives its investors a warm comfort of exposure with future contracts that feature physical gold bullions. Even with a “medium” risk rating, HUG holds eligibility for accounts, both registered ones such as RRSP, TSFA, etc., and non-registered, too.

  1. Horizons Gold Yield ETF

            HGY hands out gold exposures through investments in different forms such as gold ETFs like SPDR Gold Mini shares ETF, security strategies for cover call options included in the gold portfolio, and cash – all of which are hedged to the Canadian dollar. With an MER as high as 1.17%, this fund manages risks and profits simultaneously using active management strategies. HGY pays monthly put dividends, and as of March 31st of this current year, it has a trailing yield of 6.78% in a 12-month range. Like the others on this list, it is eligible for registered and non-registered accounts with its “medium” risk rating.

  1. Horizons Enhanced Income Gold Producers ETF

            With its investments in gold mining and exploration companies, HEP minimizes risks by using covered call options. It pays monthly distributions, with an estimated 12-month trading yield fund of 7.39%. In terms of holdings, it has spread these to mining companies in the United States, Canada, South Africa, and Burkina Faso. With a “high” risk rating, it is eligible for all types of accounts.

  1. iShares S&P/TSX Global Gold Index ETF

            XGD invests in ten (10) of the leading gold miners such as Barrick Gold, Franco Wheaton Precious Metals Corporation, Franco Nevada, and Newmont, to name a few. Its “high” risk rating has made its presence known globally, having over 50 companies in Canada, the US, South Africa, and Peru. Being eligible for registered and non-registered investment accounts, it has a quarterly-based dividend distribution, promising to “provide long-term capital growth by replication the performance of the S&P/TSX Global Gold Index, net of expenses.”

  1. iShares Gold Bullion ETF

             CGL has direct physical gold investments to recreate its gold bullion returns, fewer fees, and expenses. This ETF is one of the best replicas of benefiting from holding real gold any ETF has to offer. CGL-7 hedges to Canadian dollars while CGL-C is the unhedged alternative trade. Both eligible for registered and non-registered accounts, it has a “medium to high” risk rating.

  1. Sprott Physical Gold Trust

            As a closed-end trust, PHYS directly invests in gold bars. Redeem your ETF unit for physical gold bullion if you want to hold these ‘babies,’ with weights between 350 and 430 troy ounces. The Royal Canadian Mint is the custodian for the trust’s stored bullion. Although not an ETF, it has similar advantages with its offerings of direct investment in physical assets and quickly buys and sells trading through self-directed brokerage accounts. Redeem physical commodities through the Royal Canadian Mint, or the Canadian Gold Reserves (MINT), to have a gold investment. In addition, MNT is an exchange-traded receipt (ETR).

Why Invest in Mining ETFs?

            As many aspiring mining investors have asked before, you might have the same golden question: Why should you invest in mining stocks? Well, this depends on what you are looking for. With the potential in offering a lot of appreciation given the right market, this ETF is ideal for risk capitals, but not your social security checks, though. On the other hand, if you want a stock with lesser risks but with the potential for some decent dividend appreciation, then you might consider levelling up to the major mining stocks.

Finally, the Golden Truth

            This article is designed to help you out initially. But the final decision is all up to you. So, before investing in the mining sector, know first how to estimate the impact of all the pricing risks involved, so you can hold forth all the possible dangers of buying on a single positive assay.


Canadian Mining Etf

Evolve Funds has launched a new ETF on the Canadian NEO Exchange, which offers actively managed exposure to the Canadian Mining ETF (CSE: CMCSA) and mining industry. Sources: 12

The NAV table identifies only the different distributions the ETF makes and shows the difference between the NAV of the Canadian Mining ETF (CMCSA) and its peers. The ETF stands out from several gold-focused ETFs that hold only a tiny portion of their holdings in physical gold bars, as it invests directly in the physical metals in its warehouses and vaults. International Value ETFs are classified as holdings trusts that allocate their holdings (or “trusts”) to physical bullion and bullion. HMDs are on the horizon, but most of them track an index; the Mining Bear ETF tracks the S & P 500 index, the Dow Jones Industrial Average, and the US dollar index. Sources: 2, 4, 9

The Horizons Gold Yield ETF (HGY) also provides a hedge against covered calls to generate income. Horizons also have another gold ETF, HUG, which tracks the Gold Rolled Exchange – Traded Fund (GTRF), a gold-specific exchange-traded fund. Sources: 11

Top holdings include Newmont Mines and Barrick Gold, and leading stocks in the GTRF range from 1.5% to 3%. If you want to invest in gold companies, the Ishares Canadian Gold Mining ETF (GUG) is the best option, with a dividend yield of 1% and a 5% return on gold stocks. The best options are the ISHAres Canada Gold Mining ETF, which offers a dividend of 2.4% and an 8% return on silver, while the Gold Yield ETF is a 3.2% income fund with an annual dividend of 11.6% and a share price of 4.7%. If you are looking for a gold company to invest in, the best option is an ISHares Canada Gold Mining ETF (HUG) or the Gold Y Return Fund, which pays an annual dividend of 18.8%. Sources: 8, 9

JGLD is an index-based ETF whose underlying index is designed to track gold companies based in the US. The weighting scheme starts with a market cap weight, then changes the weighting scheme and begins at the end of the year. JGLd tracks the S & P 500 Junior Exploration & Exploration Junior Gold Index, composed of companies engaged in gold mining in Junior Exploration. Sources: 7, 8

Eligible assets include gold mining companies in the US, Canada, Australia, New Zealand, South Africa and the UK. GDXJ has many different mining companies in its holdings, and although the gold miner ETF is a low-yield one, Victoria has been included as a junior mining share in the GDxJ index. Individual gold and mining stocks have significantly reduced their holdings in this fund, so the fund needs to reduce its ownership structure, as illustrated in the chart below. Sources: 1, 7, 12

The TSX Gold Penny Stocks are derived from market data, and companies and their current share prices are listed below. In the US and Canada, there are several exchange-traded securities – traded funds for gold and gold. For example, it allows you to invest in some of the world’s largest gold mining companies, companies such as Goldcorp, Rio Tinto and Barrick Gold, as well as other gold miners. Sources: 3, 9, 13

Over this period, we have shown the ETF’s stocks, which provide a snapshot of their performance over the past 12 months. This provides an overview of the performance of individual companies and their stock holdings and a breakdown of their market capitalization. It shows the current market capitalization, market value and share price for each of these companies during the period. Sources: 6, 10

The inventory data show the underlying US funds in which GDX is invested, primarily to maintain exposure to the securities of the index. It also offers a breakdown of the holdings of individual companies and their market capitalization, market value and share prices over the last 12 months. The holding data shows the investments in each of these US funds in which GDZ invests mainly to gain access to a broader range of securities and exposure to securities indices. Sources: 6

The majority of the ETF consist of ETFs that track the price of gold, such as the Gold Bullion Index (GDX) and the Gold Trust ETF (GDX). The ETF invests in gold bars, silver, platinum, palladium and other precious metals, and silver and gold futures. Sources: 0, 14

Barchart is committed to ensuring digital accessibility of the GDXJ, and investors will have access to the latest information on the fund and its evolution over time when it is traded on the GDxJ exchange. The historical ETF quotes and charts will help you track the funds’ performance during trading and give you insight into these. Precious metals ETFs include gold, silver, platinum, palladium and others, such as the Gold Bullion Index (GDX) and Gold Trust ETF (GDDX), and the company has mined silver and gold and nine production mines. This junior gold mining company is one of the largest gold miners in Canada and a significant producer of gold bars and silver. Sources: 1, 5, 6, 8

Cited Sources

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