# TSE:MNT vs ASX:PMGOLD



## Lurker (Sep 29, 2021)

I'm comparing the Royal Canadian Mint's Gold Reserve ETR (TSE:MNT) to the Perth Mint Gold fund (ASXMGOLD), which is traded on the Australian Securities Exchange. The funds are similar in that they are both publicly traded shares of unallocated gold stored in a government mint that you can redeem for physical gold, if you choose to do so. They also both trade in their native currency (CAD for MNT and AUD for PMGOLD) so they are both unhedged for currency. Furthermore, PMGOLD has a lower annual fee of 0.15% than MNT, which is 0.35%. So, I would expect these two funds to have similar performance. However, the 5 year return on MNT is +24% while it is only +5.7% on PMGOLD. I don't understand the large difference. I thought it might be that the Australian dollar weakened relative to the Canadian dollar over the 5 year period, and it did by about 7% according to my calculations, but that still doesn't account for the major difference between the performance of these two funds. Can someone please explain what I'm missing?


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## Lurker (Sep 29, 2021)

Correction: (ASXMGOLD) should be (ASX: PMGOLD).


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## james4beach (Nov 15, 2012)

Lurker said:


> However, the 5 year return on MNT is +24% while it is only +5.7% on PMGOLD. I don't understand the large difference.


By my calculation, the ideal return of gold *in CAD* over the last 5 years, including the MNT fee, should have been +28% whereas MNT is up +26% so that's actually pretty close to the ideal return.

And by my calculation ignoring fees, the change in gold in AUD over the last 5 years should have been +45%. Here's the way I calculated that:


2016-10-16 : gold was 1256 USD x 1.31 exchange = 1645 AUD
2021-10-16 : gold is 1767 USD x 1.348 exchange = 2382 AUD
The 5 year change is 2382/1645 = +45%

I can't speak to why that Australian fund isn't tracking gold like it should be. If it's tracking bullion, you would expect to see something like a +45% price increase.

You're asking the right questions @Lurker . I realize this is a lot more work, but you could load up a safe with a few bars of gold, and then there wouldn't be any doubt about whether it tracks the price of bullion


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## james4beach (Nov 15, 2012)

Lurker said:


> ... while it is only +5.7% on PMGOLD


Hey, are you sure about this? I took a look at









Gold Corporation (ASX:PMGOLD) Share Price - Market Index


Today’s PMGOLD share price, stock chart and announcements. View dividend history, insider trades and ASX analyst consensus.




www.marketindex.com.au





This says 5 years ago, the share price was $16.60 and today is $24.24. That's an increase of +46% which exactly matches my calculation.


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## Lurker (Sep 29, 2021)

james4beach said:


> Hey, are you sure about this? I took a look at
> 
> 
> 
> ...


I just discovered my mistake. 

I got the 5 year return from this page on the Perth Mint website: Perth Mint Gold (ASX) - The Perth Mint, Australia

However, I missed the asterisk that states the 5 year return is annualized. Thanks for leading me to discover my mistake.


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## james4beach (Nov 15, 2012)

Lurker said:


> I just discovered my mistake.
> 
> I got the 5 year return from this page on the Perth Mint website: Perth Mint Gold (ASX) - The Perth Mint, Australia
> 
> However, I missed the asterisk that states the 5 year return is annualized. Thanks for leading me to discover my mistake.


No worries.

I'm kind of jealous that the Aussies have this product. This is a lot like the Royal Canadian Mint units... also backed by the government.

But wow, their fee is much lower.


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## Lurker (Sep 29, 2021)

james4beach said:


> No worries.
> 
> I'm kind of jealous that the Aussies have this product. This is a lot like the Royal Canadian Mint units... also backed by the government.
> 
> But wow, their fee is much lower.


The fee is much lower, but after my original post I learned the two funds aren't really comparable. The reason is because with MNT the Royal Canadian Mint is the custodian of a pool of gold it stores on behalf of the fund's shareholders, who own the metal. The shares of PMGOLD are structured as options to take delivery of gold from the Perth Mint and not ownership of the metal prior to exercising the option. So, the Perth Mint isn't obligated to store a pool of physical gold in their vault to cover the shares of this fund and that explains why they can keep the annual fee so low.


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