Keep More of What You Earn with Sprott Physical Gold Trust (PHYS)
Sprott Physical Gold Trust (NYSE Arca: PHYS) lets you own physical gold in a convenient and secure way that has potentially favorable tax advantages for U.S. non-corporate investors, versus owning gold through ETFs or directly through coins or bullion.
|U.S. Tax Treatment if
Held Over 1 Year
|Sprott Physical Gold Trust1
15% or 20%2
Taxed at Long-Term Capital Gains Tax Rate
|Gold ETFs, Coins, Bullion
Taxed at Collectibles Tax Rate
The PHYS Tax Advantage for U.S. Investors
This bar chart compares the after-tax returns of hypothetical investments of $100,000 in PHYS and a hypothetical gold ETF,3 for the 1-, 3-, 5- and 10-year periods ending 12/31/2020. For the PHYS example, we assume a 35% short-term capital gains tax rate4 for the 1 YR period and a 15% long-term capital gains tax rate for periods longer than one year. For the Hypothetical Gold ETF, we apply the 35% short-term capital gains tax rate4 for the 1 YR period and the 28% collectibles tax rate for periods longer than one year.
This chart represents hypothetical investment examples and is shown for illustrative purposes only.
PHYS Offers Other Advantages
In addition to tax considerations, PHYS can offer several advantages when compared to other gold ETFs, including:
|Sprott Physical Gold Trust (PHYS)||Hypothetical Gold ETF|
|Product & Tax Structure||
Closed-End Exchange Listed Trust
Example: Open-Ended ETF such as Grantor Trust
|Tax Treatment if Held > 1 Year||
Taxed at Long-Term Capital Gains Tax Rate7
Taxed at 28% Collectibles Tax Rate8
|Redemptions||Fully Redeemable for Physical Bullion||Example: Physical Redemption Restricted to Authorized Participant Institutions|
Gold Stored at Royal Canadian Mint
Example: Gold Stored in Commercial Bank Vaults such as HSBC or J.P.Morgan
|N/A; the Mint shall not assign or transfer its obligations||Example: Commercial bank vaults can use sub-custodians for storage and other duties. These sub-custodians may themselves select sub-custodians to perform their duties, creating additional and unknown counterparty risks|
|Fees9||Total Annual Operating Expense Ratio of 0.45%||Example: Total Annual Operating Expense Ratios typically range between 0.25% to 0.40%|
|1||Requires the timely filing of IRS Form 8621 with your tax return.|
|2||15% long-term capital gains tax rate for single filers earning between $40,000 to $441,450 per year; 20% long-term capital gains tax rate for married filers earning over $496,600 per year.|
|3||The performance of the "Hypothetical Gold ETF" is based on the historical performance of Sprott Physical Bullion Trust (PHYS) and treating it as an investment subject to the 28% collectibles tax.|
|4||For U.S. investors who purchase and sell PHYS in less than one year, short-term capital gains will be treated as ordinary income and will be taxed 10% to 37%, depending on income level. As an example, 35% applies to U.S. single filers earning between $207,351 to $518,400.|
|5||Source: How Are Collectibles Taxed? Investopedia.|
|6||For more information, please see "Tax Considerations-U.S. Federal Income Tax Considerations" in the Prospectus and always consult your tax accountant regarding your particular situation.|
|7||For U.S. non-corporate investors only; requires the timely filing of IRS Form 8621; units must be held for at least one year.|
|8||Applicable only if the shares are held for more than one year; the tax rates for capital gains recognized upon the sale of assets held by an individual U.S. shareholder for one year or less are generally the same as those at which ordinary income is taxed.|
|9||As of 12/31/2020.|
The Sprott Physical Gold Trust is generally exposed to the multiple risks that have been identified and described in the prospectus. Please refer to the prospectus for a description of these risks. This material must be preceded or accompanied by a prospectus. For an additional copy of the prospectus please visit https://sprott.com/investment-strategies/physical-bullion-trusts/gold/.
Precious metals investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Precious metals investments have price fluctuations based on short-term dynamics partly driven by demand/supply and also by investment flows. Precious metals investments tend to react more sensitively to global events and economic data than other sectors.
Past performance is not an indication of future results. All data is in U.S. dollars unless otherwise noted. The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be tax, legal, accounting or professional advice. Readers should consult with their own accountants and/or lawyers for advice on their specific circumstances before taking any action. Sprott Asset Management LP is the investment manager to the Sprott Physical Gold Trust (the “Trust”). Important information about the Trust, including the investment objectives and strategies, applicable management fees, and expenses, is contained in the prospectus. Please read the prospectus carefully before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or operational charges or income taxes payable by any unitholder that would have reduced returns. You will usually pay brokerage fees to your dealer if you purchase or sell units of the Trusts on the Toronto Stock Exchange (“TSX”) or the New York Stock Exchange (“NYSE”). If the units are purchased or sold on the TSX or the NYSE, investors may pay more than the current net asset value when buying units or shares of the Trusts and may receive less than the current net asset value when selling them. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation to anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds managed by Sprott Asset Management LP. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell.