Gold ETFs in Canada: How They Compare to Physical Gold

Last reviewed: November 11, 2026. Sources are linked in the text.

This guide explains how Canadian-listed gold ETFs and gold trusts are structured and how that differs from owning physical bullion. It is general educational information about how these funds are put together, not investment advice, and not a recommendation to buy, sell or hold any specific security named below. Gold in Canada is not a registered investment dealer or advisor, and nothing here replaces professional advice.

Gold in Canada has no paid partnership with, and earns no commission from, any fund or trust manager named in this guide, a deliberate contrast with this site’s bullion-dealer partnerships, which are disclosed separately wherever they appear. Before buying units of any fund here, read its own prospectus or ETF Facts document and consider speaking with a registered investment advisor or dealer about whether it fits a portfolio.

An ETF unit is a security, not a bar of metal

Buying a unit of a gold ETF, or of a closed-end trust like Sprott’s, means buying a claim on a pool of assets managed by a company, traded on a stock exchange and governed by securities law and a prospectus. It does not mean taking delivery of metal; an ordinary retail holder generally has no simple right to show up and collect gold bars. Some funds offer bullion redemption to unitholders meeting minimum size requirements, noted below where it applies, but that is the exception, not how most people hold these products.

What a fund actually holds varies by type: shares of gold-mining companies, physically allocated bullion in a vault, or, for some international funds not covered here, gold futures. This matters because it changes what a return is tied to: a mining company’s operations and balance sheet, or the spot price of gold itself, minus fees.

Four Canadian-listed gold funds, checked against the manager’s own current documents

These four funds were confirmed as currently listed and trading as of November 2026, checked against each manager’s own fact sheet, ETF Facts document or prospectus rather than a third-party summary. Figures such as the MER and net asset value change regularly; check the linked source before relying on them. For all four, confirm registered-plan eligibility with a plan trustee before buying.

iShares S&P/TSX Global Gold Index ETF (XGD)

• Holds: equity securities of international gold-mining and related companies in the S&P/TSX Global Gold Index, 64 to 66 holdings as of October 2026, led by Newmont, Agnico Eagle Mines, Barrick Mining and Wheaton Precious Metals. No physical gold.
• MER: approximately 0.60%, per BlackRock’s ETF Facts (June 19, 2026).
• Registered accounts: BlackRock’s own fact sheet (data Oct. 31, 2026) lists XGD as “Eligible for Registered Plans: Yes.”
• Structure: standard Canadian ETF, Toronto Stock Exchange, launched March 23, 2001.

BMO Equal Weight Global Gold Index ETF (ZGD)

• Holds: an equal-weighted basket of roughly 40 global gold-mining equities tracking the Solactive Equal Weight Global Gold Index, with Royal Gold, Perpetua Resources and Seabridge Gold among the largest positions (Sept. 30, 2026). No physical gold.
• MER: 0.60%, per BMO’s ETF Facts (Jan. 23, 2026), confirmed on BMO’s own fund page (Nov. 6, 2026).
• Registered accounts: BMO’s own monthly summary (Sept. 30, 2026) lists ZGD as “RSP Eligible: Yes.”
• Structure: standard Canadian ETF, Toronto Stock Exchange, launched November 14, 2012.

Sprott Physical Gold Trust (PHYS)

PHYS is not technically an ETF. Sprott’s own fact sheet describes it as a closed-end trust, a distinct legal structure from an exchange-traded fund, even though it trades on an exchange the same way an ETF does and is often grouped with ETFs in casual conversation.

• Holds: physical, fully allocated, unencumbered London Good Delivery gold bars, held by the Royal Canadian Mint. As of September 30, 2026 the trust held about 3.75 million ounces of gold, representing 99.8% of net asset value.
• MER: 0.39%, per Sprott’s own fact sheet, period ended June 30, 2026.
• Registered accounts: Sprott’s own prospectus states the trust units “will be qualified investments for certain funds, plans and accounts under the Income Tax Act (Canada), subject to the qualifications set out in such prospectus supplement.” The same prospectus flags that a plan redeeming units for physical bullion rather than cash would hold bullion that is not a qualified investment for that plan, which can trigger adverse tax consequences.
• Structure: closed-end trust managed by Sprott Asset Management LP, trading on the Toronto Stock Exchange as PHYS (Canadian dollars) and PHYS.U (U.S. dollars), and on NYSE Arca as PHYS. Launched February 24, 2010.

Purpose Gold Bullion Fund (KILO)

• Holds: physical gold bars, reported at 100.4% of fund value (the small excess reflects a minor cash offset) as of August 31, 2025, per Purpose’s own ETF Facts document. The fund’s brochure, dated June 30, 2026, describes the gold as held at the Royal Canadian Mint, with redemption by physical delivery available to unitholders who meet minimum requirements.
• MER: 0.28%, per Purpose’s ETF Facts (Oct. 31, 2025) and brochure (June 30, 2026). The underlying management fee is 0.20%; the MER adds operating costs.
• Registered accounts: Purpose’s own ETF Facts document discusses holding the fund in “a registered plan, such as a Registered Retirement Savings Plan or a Tax-Free Savings Account,” and the fund trades on the Toronto Stock Exchange, a designated exchange under the Income Tax Act.
• Structure: a mutual fund trust that issues exchange-traded units, managed by Purpose Investments Inc., trading as KILO (Canadian-dollar, currency-hedged), KILO.B (Canadian-dollar, non-hedged) and KILO.U (U.S.-dollar). Launched in 2018.

How owning fund units differs from owning metal

• Storage and insurance. A fund handles vaulting, insurance and security for any physical holdings as part of its operating costs, reflected in the MER. A direct bullion owner carries that personally, through a home safe, a safety deposit box or paid storage.
• What you actually own. A unitholder owns a security representing an interest in a fund’s assets, subject to that fund’s governing documents, trustee and manager. A bullion owner owns the metal itself, directly.
• Counterparty and structure risk. These differ in kind, not just degree. A fund depends on its manager, trustee, custodian and prospectus terms continuing to operate as described. A direct bullion holder depends on their own storage arrangements and on finding a buyer when they want to sell.
• GST/HST treatment. Physical bullion meeting the federal definition of a “precious metal” (a bar, ingot, coin or wafer of gold refined to at least 99.5% purity, generally recognized for trading on Canadian financial markets) is treated by the CRA as a financial instrument whose sale is zero-rated or exempt from GST/HST under the Excise Tax Act. A fund unit is not bullion under this rule; it is a different category of financial instrument, an equity or trust interest. The purity-and-form test that exempts physical bullion does not apply to a security. Trading fund units through a brokerage follows the separate rules for securities, not the bullion test.
• Capital gains tax. Selling fund units at a profit in a non-registered account triggers a capital gain, taxed the same way regardless of what the fund holds underneath. As of the 2025 tax year, the CRA applies the long-standing one-half inclusion rate to capital gains for individuals; a proposed increase to two-thirds was cancelled by the federal government in March 2025. The tax treatment follows the security, not the metal inside it.

Liquidity: trading hours versus finding a buyer

A listed ETF or trust unit can be bought or sold any time the Toronto Stock Exchange (or, for PHYS, also NYSE Arca) is open, at a visible market price, typically settled within a day or two. Selling physical bullion means finding a dealer or private buyer willing to pay a fair price for that specific coin or bar, which can take longer and may involve a wider spread, particularly for larger amounts or less common products. Neither approach is free: funds charge an ongoing MER, while physical bullion carries a dealer premium on both the buy and sell side.

Mining-company funds versus bullion-backed funds

This is the structural distinction that most affects how closely a fund tracks the gold price. XGD and ZGD hold shares of mining companies, so returns depend on those companies’ production costs, debt levels, management decisions and exploration results, in addition to the price of gold itself. A mining-equity fund can fall when gold rises, or rise faster than gold, because company-specific risk sits on top of the metal price. PHYS and KILO instead hold physical bullion directly, so net asset value tracks the spot price of gold closely, with divergence coming mainly from fees and, for exchange-traded units, the gap between market price and net asset value. Neither structure is described here as better than the other; they expose an investor to different things, and whether either fits a particular portfolio is a question for that investor and their own advisor.

Frequently asked questions

Is a gold ETF the same as owning gold?

No. A gold ETF or trust unit is a security traded on a stock exchange. It may represent a claim on mining-company shares or on physically held bullion, but either way the investor owns the fund unit, governed by a prospectus, not the metal itself. A few bullion-backed funds offer redemption for physical metal to unitholders meeting minimum size requirements; most retail holders never use that feature and simply trade units on the exchange.

Can I hold a gold ETF in my RRSP or TFSA?

Most Canadian-listed ETFs and trust units, including the funds above, are generally described by their own managers as eligible for registered plans, because they are listed securities on a designated Canadian stock exchange. Eligibility rules and fund-specific exceptions, such as the bullion-redemption caveat noted for PHYS above, can change, so confirm current eligibility with the plan’s trustee or administrator before buying.

What’s the difference between an ETF and a trust like Sprott’s?

Both trade on an exchange and both are loosely called “funds,” but they use different legal structures. An ETF like XGD, ZGD or KILO continuously issues and redeems units to keep its market price in line with net asset value. Sprott’s PHYS is a closed-end trust: it issued a fixed pool of units through a prospectus offering, and those units then trade on the exchange, so market price can drift further above or below net asset value than is typical for a conventional ETF. Sprott’s own fact sheet reports this premium or discount regularly.

Do gold ETFs pay dividends?

Bullion-backed funds like PHYS and KILO generally do not generate income, since physical gold produces no dividends or interest, so they make little or no regular distribution. Mining-equity funds like XGD and ZGD can pass through dividends paid by the underlying companies; both currently list an annual distribution schedule in their own fund documents, though the amount is not guaranteed and changes year to year. Check each fund’s distribution history on its manager’s website for current figures.

Sources

• BlackRock Canada, XGD ETF Facts (June 19, 2026): blackrock.com
• BlackRock Canada, XGD fact sheet, data Oct. 31, 2026, checked Nov. 11, 2026: blackrock.com
• BMO Asset Management Inc., ZGD ETF Facts (Jan. 23, 2026): fundfacts.bmo.com
• BMO Global Asset Management, ZGD fund page, data Nov. 6, 2026, checked Nov. 11, 2026: bmogam.com
• BMO Global Asset Management, ZGD monthly summary (Sept. 30, 2026): df.bmogam.com
• Sprott Asset Management LP, PHYS fact sheet (Sept. 30, 2026): sprott.com
• Sprott Asset Management LP, PHYS product page, checked Nov. 11, 2026: sprott.com
• Sprott Physical Gold Trust prospectus, checked Nov. 11, 2026: sprott.com
• Purpose Investments Inc., Gold Bullion Fund ETF Facts (Oct. 31, 2025): documents.purposeinvest.com
• Purpose Investments Inc., Gold Bullion Fund brochure (June 30, 2026): documents.purposeinvest.com
• Purpose Investments Inc., Gold Bullion Fund product page, checked Nov. 11, 2026: purposeinvest.com
• Canada Revenue Agency, GST/HST Memorandum 17-1, “Financial Instrument” (July 2026 version): canada.ca
• Canada Revenue Agency, Line 12700, Taxable capital gains, checked Nov. 11, 2026: canada.ca
• Prime Minister of Canada, news release cancelling the capital gains inclusion rate increase (March 21, 2025): pm.gc.ca
• Canada Revenue Agency, Income Tax Folio S3-F10-C1, Qualified Investments, checked Nov. 11, 2026: canada.ca