PHYS vs GLD: Which Gold Fund Is Right for You?
PHYS and GLD are the two most-discussed gold funds among North American investors. Both are backed by allocated gold, and both are loosely called "gold ETFs" - but they are not the same kind of vehicle. PHYS is a closed-end trust whose units can trade above or below the value of the gold behind them; GLD is an exchange-traded grantor trust. That structural difference drives most of what follows: tax treatment, premium and discount behaviour, expense ratio and redemption rights.
For Canadian investors, PHYS is generally the more straightforward holding: it is TSX-listed and capital property at the one-half inclusion rate, while GLD may be treated less favourably by CRA. For US investors the two are taxed under entirely different regimes - GLD is a grantor trust taxed as a collectible at up to 28%, while PHYS is a PFIC that can reach the 0%, 15% or 20% long-term rates only with a timely QEF election on Form 8621. The expense ratios are effectively level (0.39% vs 0.40%), and both funds are listed on designated stock exchanges, so both generally qualify for a Canadian registered account. The real distinctions are tax regime and the fact that PHYS can trade at a premium or discount to NAV.
- Is PHYS better than GLD for Canadians?
- For most Canadian investors in taxable accounts, PHYS is the more straightforward holding: it is a TSX-listed Canadian trust, so a gain is generally capital property with one-half included in income (the enacted rate as of September 2026). GLD may be treated less favourably by the CRA. In a registered account both generally qualify, because both are listed on designated stock exchanges. Consult a tax professional for your specific situation.
- Can I hold PHYS in my RRSP or TFSA?
- Yes. PHYS is listed on the Toronto Stock Exchange (TSX), a designated stock exchange, and units listed on one are qualified investments for RRSPs, TFSAs and RRIFs (CRA Income Tax Folio S3-F10-C1, paragraph 1.16). GLD's NYSE Arca listing brings it under the same rule, so eligibility does not separate the two. PHYS also has a Canadian-dollar listing; GLD's NYSE Arca listing is in US dollars.
- What is the expense ratio difference between PHYS and GLD?
- PHYS reported an MER of 0.39% as at 30 June 2026 and GLD has a 0.40% gross expense ratio, so the gap is about $5/year per $50,000 — effectively immaterial. PHYS's 0.35% figure that is often quoted is its management fee, not its total expense ratio, and comparing it to GLD's all-in number overstates the difference.