[james4beach]

The MNT premium has dropped down to 4.7% at the moment, almost back to normal.

 

[james4beach]

Premium now down to 2.3% ... this is great. I wonder what pushed it to normalize.

 

[james4beach]

Looks like some of the excess might be coming off MNT! Down 10.4% today.

Edited to add more detail: according to the stock data I have, today was the largest single day drop in MNT's history. The only day that comes close is a 3% drop back in Feb 2015.

The decline today is due to a combination of gold (in USD) dropping + the USD dropping + premium reduction. Gold certainly can be a very volatile beast!

 

[Topo]

Today MNT is down 2.38%, while CGL.C is up 0.84%.

 

[james4beach]

I've been in contact with the Mint's program administrator for MNT.

I asked them why the Mint does not issue more units, as there is demand, and issuing shares would reduce the premium and expand the asset base. They told me that since COVID-19, the Mint has had to focus on refining and bullion operations which were deemed an essential service for the economy. They are aware of the high premium to NAV, and I was also told that "senior leadership is certainly focused on the ETR".

 

[hfp75]

Doesn't mean they are going to do anything about it....

Also if they do add more gold and the price stabilizes then I might swap back 1:1 from cgl.c

As it is Gold has been pretty volatile lately and the premium has been pretty stable at 10%+

 

[james4beach]

Doesn't mean they are going to do anything about it....

Also if they do add more gold and the price stabilizes then I might swap back 1:1 from cgl.c

As it is Gold has been pretty volatile lately and the premium has been pretty stable at 10%+

Here's a long term view. I've been taking samples of the premium/discount ever since 2016. When I average all the premiums across these sample, I actually get 0.70% because there were also discounts in the past. This isn't a completely scientific reading but it does show that this premium fluctuates, and on average, may "even out". The same was true for CEF over many years.

This may not be a bad thing. I bought in previous years, when gold was unpopular, at a discount to NAV. Recently I rotated somewhat from MNT to CGL.C when there was this premium. And in the future when a discount emerges again, I can rotate back from CGL.C into MNT, buying more at a discount.

 

[james4beach]

As it is Gold has been pretty volatile lately and the premium has been pretty stable at 10%+

The premium entirely came off MNT today.

Calculating MNT's NAV at the end of the day, I get roughly 25.85 fair value and the shares closed at 25.92 which is awfully close ... about 0.3% premium.

 

[doctrine]

QBTC is undoubtedly sucking up some of the excess/incremental demand. They just raised an additional $100M over two offerings in the last week. QBTC was also trading at a high premium to NAV which has also disappeared. It's good for new investors into these asset classes, although I don't own either myself.

 

[james4beach]

Now 0% premium, MNT is trading exactly at NAV.

If some kind of a discount to NAV emerges, I'll move money from other gold ETFs and buy MNT at a discount.

 

[james4beach]

Today is a very weak day for gold, and I calculated the real-time premium using spot prices for gold and USD.

MNT is currently trading at 0.08% premium to NAV

 

[hfp75]

My tracking (gold price x exchange rate x fractional gold held = actual unit value)

1805 x 1.3 x 1.010564 = 24.79 and it is trading at 24.50 or a discount of -0.29c which is -1.16%

So, a 1.2% discount to actual gold value.

 

[doctrine]

Another $50M offering in QBTC continuing to hit away at NAV premiums on both perhaps.

 

[vnenov]

My tracking (gold price x exchange rate x fractional gold held = actual unit value)

1805 x 1.3 x 1.010564 = 24.79 and it is trading at 24.50 or a discount of -0.29c which is -1.16%

So, a 1.2% discount to actual gold value.

I've just switched my CGL.C holdings with MNT as it's now trading at -1.2% discount to gold.

 

[vnenov]

I've just switched my CGL.C holdings with MNT as it's now trading at -1.2% discount to gold.

Can someone comment if CRA will allow claim of capital loss when switching between CGL.C and MNT? They both track gold in Canadian dollars, but one is ETF and the other ETR and also behave quite differently. One has to just compare the graph of the funds to see that they are not identical properties.

Anyone has an answer? Will highly appreciate it.

 

[doctrine]

It is plausible I suppose, but I guess it depends. You can do it with any ETF even if they track similar asset classes. For example, you can sell XIC and buy VCN at the same time and if you have a capital loss on XIC you can claim it. ETFs may actually reduce the effect of tax loss selling because you can just realize your losses and buy back another of similar type, and that would be supportive of prices of the underlying assets. I guess it does have to be different indexes, but for most major indexes and sub-indexes there are multiple options. Gold may be different.

 

[vnenov]

You can do it with any ETF even if they track similar asset classes. For example, you can sell XIC and buy VCN at the same time and if you have a capital loss on XIC you can claim it.

Thanks. As far as I know you can do this only if the ETFs tracking similar asset classes are based on different underlying indexes. With different ETFs tracking the same index, capital loss selling would not be allowed. In your example it will be allowed as VCN tracks FTSE Canada All Cap Domestic Index and XIC tracks S&P/TSX Capped Composite Index.

This is why I am not sure about the pair CGL.C and MNT. They are not tracking an index, but suppose to track the price of gold in Canadian dollars. Still they are quite different the way they are structured (ETF vs ETR) and have different features (MNT allows the exchange for physical gold, etc).

 

[hfp75]

Another $50M offering in QBTC continuing to hit away at NAV premiums on both perhaps.

I have been watching the Crypto/Bitcoin market fly as of late (most of us probably have) and from my reading it would appear that younger investors see it as superior to gold (physical or paper). I wonder if the chronic manipulation (plague like) of the gold market has driven people out (Cryptos are probably manipulated too, just not the long hx like gold). I do think that physical gold is superior.

However I can see why Cryptos appeal. They are not based on a Fx currency (hedged vs unhedged). They will convert into whatever currency you need at the moment - this does appeal. MNT is a product designed to operate in CAD/USD basically. Cryptos are just so volatile....

If Cryptos take off more I think you will see gold drop more. This is fine with me as I think 'physical gold - is the king' and is the underlying concept that ultimately drives the price of paper gold.

If there is ever inflation in the USA (increasing likelihood at some point) I think you will see physical gold rein supreme. There could however be a competition between paper gold and cryptos (for second place)....

Either way there will be a place for Gold in my portfolio.

* Disclamer - I hold gold 22% GOLD (mix of MNT & CGL.C), I also have 3% SILVER (MNS). I have debated moving gold to 20% and adding bitcoin for 2% - but then I am like, 'am I just chasing my tail ?' What I will do this week is trade my CLG.C for MNT and hold steadfast. Patience is a virtue. (MNT is trading at a discount to NAV).

 

[james4beach]

This is why I am not sure about the pair CGL.C and MNT. They are not tracking an index, but suppose to track the price of gold in Canadian dollars. Still they are quite different the way they are structured (ETF vs ETR) and have different features (MNT allows the exchange for physical gold, etc).

Yeah I'm not sure if you can claim cap loss if switching between these 'pure bullion' ETFs. It's true that one can claim capital loss switching, say, XIU to XIC but that's because they track different indexes.

CGL.C and MNT may be considered identical properties as they really do track the same thing. Yes the mechanisms are different but I feel like they are too similar. One can't point to an index and say, they are different indexes.

 

[vnenov]

CGL.C and MNT may be considered identical properties as they really do track the same thing. Yes the mechanisms are different but I feel like they are too similar. One can't point to an index and say, they are different indexes.

Agreed. After reading the CRA interpretation bulletin for identical properties even though they have different properties, fees and structures, it does not seem like capital loss selling will be allowed in this case.