Gold Exchange Traded Funds (ETFs) can be one of the simplest ways to gain exposure to the expensive metal, without having to actually hold the physical metal. Investing in Gold ETFs can provide a good hedge against inflation alongside other positives such as transparency, exposure to real-time gold prices, liquidity, and tax efficiency.
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BMO S&P/TSX EqGld Un ETF (TSE:ZGD) and Harvest Global Gold Giants Index ETF (TSE:HGGG) are two such gold ETFs that invest in equity securities of Canadian gold mining companies. Let’s look at the two ETFs in detail.
BMO S&P/TSX Equal Weight Global Gold Index ETF (ZGD)
The BMO S&P/TSX EqGld Un ETF seeks to replicate the performance of the Solactive Equal Weight Global Gold Index. The Index invests in global securities of gold companies with minimum market cap requirements and liquidity screens.
The ZGD was founded in November 2012. It has a current expense ratio of 0.60%. The ETF has an annual distribution frequency and yield of 0.51%.
As of date, ZGD has an AUM (assets under management) of C$121.54 million, with the top ten holdings contributing 31.41% of the total portfolio. ZGD’s top three holdings include Gold Fields (TSE:GFI), Osisko Gold Royalties (TSE:OR), and Harmony Gold Mining (HMY).
Overall, the ZGD ETF has a Moderate Buy consensus rating. Of the 36 stocks held in the portfolio currently, 29 have Buys, six have Holds, and one stock has a Sell rating. Also, the average ZGD ETF price target of C$130.37 implies 21.2% upside potential.
Harvest Global Gold Giants Index ETF (HGGG)
The Harvest Global Gold Giants Index ETF seeks to track the investment results of the Solactive Global Gold Giants Index TR. The Index, in turn, invests in twenty of the world’s largest gold mining companies, providing a safer exposure.
The HGGG was founded in January 2019. It carries a relatively lesser expense ratio of 0.40%. As of date, HGGG has an AUM of $14.52 million, with the top ten companies contributing 52.15%. HGGG’s top three companies include Centamin PLC (GB:CEY), De Grey Mining Ltd. (AU:DEG), and Northern Star Resources Ltd. (AU:NST).
HGGG ETF also has a Moderate Buy consensus rating. Of the 21 stocks currently held in the portfolio, 19 have Buy and two have Hold ratings. Also, the average HGGG ETF price target of C$43.76 implies nearly 21% upside potential.
Concluding Thoughts
Investors can consider Gold ETFs to gain exposure to the precious metal. Gold ETF investing comes with a host of advantages, albeit with lower risk.
The average price targets of the ZGD and HGGG ETFs indicate attractive upside potential. Investors can consider these ETFs after thorough research.
