CommunityGold Blog

Gold Deposit Program by BMO

January 17, 2012

End of September 2011, the BMO Financial Group launched a Gold Deposit Program in Canada. The program provides Canadian residents with the possibility to purchase and hold physical gold bullion through BMO Nesbitt Burns, the investment firm of BMO Financial group, that has offices and investment advisors across Canada.

There is only limited information on the Gold Deposit Program available online. Some of the publicly available program details include:

  • The gold is allocated and held on a segregated basis at an approved third-party storage facility in a custody account
  • Minimum investment amount is 1 ounce of gold
  • Purchases will be denominated in Canadian dollars and feature daily liquidity
  • BMO does reportedly not charge storage or management fees
  • Investors can take physical delivery of their gold

The information about fees is quite interesting. It is stated that “fees will apply if physical delivery is requested. BMO may earn revenues (or suffer losses) from the sale of gold bullion.”

We are currently trying to get hold of more information. We would appreciate any information about the terms and conditions of the Gold Deposit Program.

As soon as we will have learned more, we will provide more information at trustablegold.com.



2 Comments to Gold Deposit Program by BMO

  1. Greg Wood wrote:

    Also there is a redemption fee on MTL001 when sold. Current redemption fee is 2%.

    You have the option with MTL001 to request physical delivery at any time after purchase for the same $100 delivery charge as for MTL002.


  2. Greg Wood wrote:

    BMO has a document, not a prospectus, but an investor information sheet. I have requested one but haven’t seen it yet.

    There are two separate mutual funds set up. Prices are in Canadian dollars. Units of each fund have exactly 1/10 troy ounce of gold.

    One fund (code MTL002) is for physical delivery of the purchased gold bullion to your address. Delivery charges are CA$100 per troy ounce, plus sales tax.

    You have apparently no choice in the size of gold bars you receive, although I expect if you ordered 1 oz. (min order size) you would receive a 1 oz. bar, not 10 x 1/10 oz. wafers, and if you ordered 10 oz. you would get one 10 oz. bar.

    The other option is to have your gold stored at the Royal Canadian Mint at no charge, and with no storage fee! This one trades like any other mutual fund, with day-end settlement price, fund code is MTL001.

    No Bid/Ask prices, you buy or sell at the same day end price. I can’t quite figure out how they arrive at the unit price, they show the MTL001 price for Dec.1 at $179.862, but closing gold price that day was US$1,739.80, implying an exchange rate of 96.730 cents, while the end of day exchange rate for Dec 1 was about 98.6 cents.

    They are both available through Investorline, BMO’s discount broker. Commission is CAD$35 per ounce plus 1%. MTL002 has the delivery charge included in the quoted price.

    I don’t yet know whether BMO guarantees to sell you as many units as you order at that day’s unit price, or if they can limit your order. But I believe once you hold units of MTL001 in your account, you have guaranteed same day liquidity, subject to cut-off times.

    MTL002 is more expensive than Scotia Mocatta to buy physical gold, but I think MTL001 might be a great vehicle for smaller gold traders who need liquidity with reasonable transaction costs

    …Greg


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