Purpose launches physical gold ETF on TSX

Nov 1st, 2018 | By | Category: Commodities

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Purpose Investments has launched the Purpose Gold Bullion Fund (KILO CN) on Toronto Stock Exchange, providing a low-cost means for investors to access the performance of gold.

Purpose Investments launches physical gold ETF on TSX

Gold held by the fund is stored in the treasury vault of the Royal Canadian Mint.

An investment in the fund is fully backed by physical gold which is held on a segregated basis in the treasury vault of the Royal Canadian Mint. Unlike many banks and other financial institutions, the Mint is fully backed by the Canadian government.

Investors in the fund are able to receive in-kind redemptions of their physical gold directly from the Mint.

The minimum redemption requirement is one kilogram which is one-tenth of the redemption requirements of other physical gold bullion funds listed in Canada.

Gold has historically acted as a safe haven during periods of market stress and may serve as an important diversifier in portfolios due to its low correlation to traditional asset classes.

“Purpose Gold Bullion Fund is launching at an appropriate time as equity markets are showing increased levels of volatility following years of stability and outsized returns,” said Som Seif President and CEO of Purpose Investments.

The fund comes with a management expense ratio (MER) of just 0.20% which is three basis points more than the US-listed GraniteShares Gold Trust (BAR US) – the world’s cheapest gold ETP.

Purpose Investments will be hoping the fund’s low price tag may tempt investors away from some of the larger physical gold ETFs listed in Canada such as the iShares Gold Bullion ETF (CGL CN) which has over C$300 million in AUM and comes with a MER of 0.55%.

The ETF is offered with three share classes: Canadian dollar, hedged (Ticker: KILO CN); Canadian dollar, non-hedged (KILO.B CN); and US dollar-denominated (KILO.U CN).

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