-
Royal Canadian Mint - Canadian Gold Reserves Exchange-Traded Receipts (MNT $66.75)
-
Sprott Physical Gold Trust Unit (PHYS $35.90)
-
Royal Canadian Mint - Canadian Gold Reserves Exchange-Traded Receipts (MNT.U $48.67)
-
Sprott Physical Gold Trust (PHYS $49.10)
I would like to hold a percentage of my taxable accounts in gold (represented by an etf) in both Canadian and US dollars. My taxable account is approximately 2/3 C$ denominated and 1/3 US$ denominated.
My criteria are:
1 - One product has to be dominated in Canadian dollars and the second product has to be denominated in US dollars
2 - the product has to be Canadian domiciled to avoid T-1135 reporting and US estate tax issues.
3 - Two separate products are required to keep ACB tracking simplified.
4 - Product has to be denominated in C$ and US$
Reviewing previous answers, the products I think are representative are:
MNT.CA / MNT.US
PHYS.CA / PHYS.US
Questions
1 - Does this strategy seem reasonable?
2 - Are there any other products I should be looking at?
3 - Which product would be your first choice and which would be second choice.
Thank you
This strategy could make sense for a few reasons: having assets in both currencies reduces exposure to foreign exchange fluctuations, while at the same time reduces T1135 complexity, and it is also cleaner to check the cost basis. There are other alternatives that investors can also consider, such as CGL and ZGLD.
If investors are looking for Canadian domicile with both USD and CAD tickers, we think PHYS is a better choice relative to MNT. Both are fully backed by physical gold, but PHYS tends to have better liquidity with dual listings and could trade at a discount to NAV occasionally. Meanwhile, historically, MNT trades at a premium to NAV with lower liquidity, and that premium could be a drag on long-term returns.
Overall, we think investors can hold PHYS in both CAD and USD and think of them as the same asset with different currency exposure. We think this would be a simpler thesis, while avoiding different structures and still allowing investors to track the cost basis effectively.