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Are Gold ETFs worth it?
June 26, 2021
7:39 pm
saren
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I'm thinking about inflation and ETFs, so I thought about Gold ETFs, i.e. the actual Gold (not so much the miners/companies although I am open to that as well). Gold Bullion ETF vs Gold ETF (with Gold stocks)? Not sure! Also, unsure to focus only on the Canadian ETFs listed on the TSX (see below) or the US based Gold ETFs as well? I have both CAD and USD in Questrade. ​

CANADIAN GOLD ETFS:

CEF: Sprott Physical Gold and Silver Bullion Trust MER: 0.51 -

PHYS: Sprott Physical Gold Bullion Trust MER: 0.42 - 5 YEAR RETURN: 8%

CGL: iShares Gold Bullion MER: 0.55 - 5 YEAR RETURN: 8% Hedged to CAD

XGD: iShares TSX Global Gold Index MER: 0.6 - 5 YEAR RETURN: 10%

ZGD: BMO Equal Weight Global Gold Index MER: 0.6 - 5 YEAR RETURN: 9%
62% in Canada Stocks, 12% USA

CGXF: Gold Giants Covered Call MER: 0.65 - 5 YEAR RETURN: 5% - YIELD: 11%

OTHER:

SLL.V - Standard Lithium Ltd.

SVR: iShares Silver Bullion MER 0.66 - 5 YEAR 9% Return

SPPP: Sprott Physical Platinum/Palladium Bullion Trust MER 1.07 - 5 YEAR 25%

I'm feeling CEF for the Gold + Silver Bullion and CGXF for the Gold Stocks and that CC Yield. ZGD is nice too for the Equal Weighted Approach toward stock holdings, but doesn't pay distributions. As for Platinum and Palladium, the MER is really high, but so are the returns. So not sure about SPPP. I'll probably get SLL.V.

June 26, 2021
8:07 pm
kelbee
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There is also MNT and MNS from Royal Canadian Mint. Their MERs look a little lower.

June 27, 2021
8:51 am
Dean
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saren said

I'm thinking about inflation and ETFs, so I thought about Gold ETFs, i.e. the actual Gold (not so much the miners/companies although I am open to that as well) . . . 

 

G'Day Saren sf-smile

Unlike you, I prefer Gold Mining Company ETF's. I find them more lucrative, and some of them have good Dividends as well.

As an example, I've held the "Horizons Enhanced Income Gold Producers ETF (HEP)" for quite some time now, and I've done Very Well with it. The MER is on the high side ... but that Monthly Dividend ( @ ~ 6%/annum) More than makes up for it ❗ sf-laugh

Details on HEP https://www.horizonsetfs.com/ETF/HEP

Maybe give it some thought ... HEP (and others like it) are Down right now, so it might be a Good entry point.

    Dean

sf-cool " Live Long And Prosper " sf-cool

June 27, 2021
10:12 am
Dean
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.
But further to mine above ... here's a Cautionary Note :

    Dean

sf-cool " Live Long And Prosper " sf-cool

June 27, 2021
11:06 am
Bill
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https://www.horizonsetfs.com/ETF/HEP

The chart at the link above, if you scroll down, shows HEP, even counting distributions reinvested according to fine print, has rarely been valued as high as 2012 value, vast majority of the time you're in a loss position, no?

I've got XGD, never even check it, don't know what it's at because it all depends on the gold price with these ETFs, pretty much, at least IMO. And when I gamble on gold I've had some success with holding individual junior exploration companies (short-term holdings usually) but it requires a fair bit of drilling results reading and interpretation, etc, if you up for that. And in my case I'm lucky to have a family member with some boots on the ground in the exploration game who can analyze geological formations, etc, etc, and that's critical to any success I've had, so you'd have to spend a lot of time getting up to speed on the exploration game to be a winner.

June 27, 2021
11:49 am
saren
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That 6% can be doubled with CGXF. And the MER on CGXF is lower as well, plus a higher yield. Similar holdings as well. CGXF is also a Gold miners ETF. I am considering it instead of the Bullion ETF.

June 27, 2021
12:22 pm
Dean
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Bill said
https://www.horizonsetfs.com/ETF/HEP

The chart at the link above, if you scroll down, shows HEP, even counting distributions reinvested according to fine print, has rarely been valued as high as 2012 value, vast majority of the time you're in a loss position, no?

. . .   

By sheer Dumb Luck, I bought HEP when it was down to ~$20.00, back in 2018. Now it's just shy of $30, which gets me an almost 50% gain (unrealised) ... and that doesn't include three years of Dividends @ 5+%.

But once again . . .
Anyone thinking of investing in gold (or gold producers) should see my second post above (post #4) ... the 'Big Picture' isn't pretty. sf-confused

    Dean

sf-cool " Live Long And Prosper " sf-cool

June 27, 2021
12:43 pm
savemoresaveoften
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Bill said
https://www.horizonsetfs.com/ETF/HEP

The chart at the link above, if you scroll down, shows HEP, even counting distributions reinvested according to fine print, has rarely been valued as high as 2012 value, vast majority of the time you're in a loss position, no?

I've got XGD, never even check it, don't know what it's at because it all depends on the gold price with these ETFs, pretty much, at least IMO. And when I gamble on gold I've had some success with holding individual junior exploration companies (short-term holdings usually) but it requires a fair bit of drilling results reading and interpretation, etc, if you up for that. And in my case I'm lucky to have a family member with some boots on the ground in the exploration game who can analyze geological formations, etc, etc, and that's critical to any success I've had, so you'd have to spend a lot of time getting up to speed on the exploration game to be a winner.  

classic proof one just cant create an outsized dividend yield out of thin air.

June 28, 2021
9:52 am
Norman1
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savemoresaveoften said

classic proof one just cant create an outsized dividend yield out of thin air.

Especially not with writing covered call options.

Studies done decades ago showed that covered call option writing will reduce long term returns.

Brokers like to promote it because option commissions are high in respect to the value of the options. Consequently, option buyers end up overpaying for the options and are long term losers. Just like those who buy overpriced extended warranties.

At the same time, option writers end up underpaid for the risk in writing the options. In spite of the fact that most options expire worthless and not exercised, the option writers are also long term losers, just like a car insurance company that doesn't receive enough premium for its policies.

August 31, 2021
11:11 pm
picassocat
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I've held CGL in the past, but today I don't deal in commodities, including bitcoin funds. In fact, I don't buy stocks anymore, I'm strictly ETF's & mutual funds and I'm doing fine.

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