Gold ETFs in Canada: how they work, costs and risks

What a gold ETF is

An exchange-traded fund pools investors’ money and trades on a stock exchange like a share. You buy and sell units through a brokerage account at any time the market is open. A gold ETF gives you exposure to gold without buying, storing or insuring bars or coins yourself.

The Ontario Securities Commission’s investor site groups gold funds with commodity ETFs. These either hold and store the commodity itself, or track a commodity index through physical holdings and derivatives. It notes they tend to be higher risk, because they’re concentrated in one sector and commodity prices move often.

Physical bullion ETFs vs gold-miner ETFs

There are two main kinds, and they behave differently.

Physical bullion ETFs. The fund owns gold bars held in a vault and aims to track the price of gold, less fees. Purpose Investments says its fund holds one kilogram bars, fully allocated and stored separately at the Royal Canadian Mint, with auditors visiting every year. BMO says its gold is held in a local BMO vault that’s audited periodically.

Gold-miner ETFs. The fund owns shares of companies that mine gold or hold rights to it. Their results depend on the gold price and on how each company is run. The iShares S&P/TSX Global Gold Index ETF held 67 stocks, and its top 10 made up 72.09% of the fund as at September 30, 2026.

A miner ETF is a stock fund focused on one industry. Its price can rise or fall more than gold itself. A bullion ETF holds a metal that pays no interest or dividends: Purpose lists its fund’s yield as N/A. Its return comes only from changes in the gold price, minus fees.

Gold ETFs in Canada and what they cost

The MER is the fund’s yearly cost, taken from the fund’s assets as a percentage of its value. You never see a bill, but it lowers your return. On $10,000, an MER of 0.22% costs about $22 a year, 0.56% about $56 and 0.61% about $61. You also pay any trading commission your brokerage charges, and the gap between the buy and sell price when you trade.

Our investment fee calculator shows how a fee difference adds up over many years.

How currency hedging works

If you hold unhedged units, your return in Canadian dollars includes two things: the change in the gold price and the change in exchange rates. Currency moves can add to your return or take away from it.

Hedged units aim to remove the exchange rate effect, so your return follows the gold price more closely. iShares offers both: CGL is hedged to the Canadian dollar, and CGL.C is unhedged. In iShares’ case the hedged units cost slightly more, an MER of 0.56% versus 0.55%.

How gold ETFs are taxed

Where you hold a gold ETF matters as much as which one you pick.

• TFSA: no tax while the money is in the plan or when you take it out
• RRSP or RRIF: no tax until you withdraw, then withdrawals are taxed as income
• Non-registered account: you pay tax on capital gains when you sell, and on any distributions the fund pays

ETFs listed outside Canada are taxed differently from Canadian-listed ones, so check before buying a US-listed gold fund. The funds in the table above are listed on the Toronto Stock Exchange, and BMO and Purpose say theirs are eligible for registered accounts.

Risks to understand before you buy

Where gold fits in a portfolio

Fund companies market gold as a diversifier. iShares says CGL can be used to help diversify a portfolio. Purpose describes physical gold as a way to protect a portfolio. Those are the issuers’ own descriptions, not guarantees, and gold has no built-in return the way bonds pay interest or stocks pay dividends.

Gold is one sector. Broad index funds spread your money across many companies, while a gold ETF concentrates it in one metal or one industry. If you’re learning the basics, start with our guide to index funds, then decide whether a gold ETF has a role in your TFSA or RRSP.