Dynamic's Gold ETF Payout Signals Major Gains in Mining Sector

TORONTO, ON – November 27, 2025 – Dynamic Funds has pulled back the curtain on its estimated year-end distributions for its active exchange-traded funds (ETFs), and the figures reveal a story of significant gains, particularly within the precious metals and broader mining sectors. While these announcements are a routine part of the annual financial calendar, the sheer scale of certain payouts provides a powerful barometer of sector performance and the effectiveness of active management strategies in a volatile market.

Leading the pack is the Dynamic Active Global Gold ETF (TSX: DXAU), which posted a staggering estimated reinvested distribution of $8.745 per unit. This figure, representing a substantial portion of the fund's value, points to a year of exceptional performance and robust capital gains realization. Also notable is the Dynamic Active Mining Opportunities ETF (TSX: DXMO), with a healthy estimated distribution of $1.002 per unit, signaling solid returns across a more diversified mining portfolio.

These preliminary numbers, based on data as of October 31, 2025, offer investors a crucial early look at potential year-end tax liabilities and underscore the strong performance trends that have defined the resource sector this year.

Understanding Reinvested Distributions and the Tax Impact

For many investors, especially those holding ETFs in non-registered accounts, the term "reinvested distribution" can be a source of confusion. Unlike a cash distribution that lands in a brokerage account, these are "phantom" payments. The fund uses realized capital gains, dividends, or interest income to purchase additional units on the investor's behalf. Immediately after, the fund consolidates its units, so an investor's unit count remains unchanged.

However, the key takeaway is that this is a taxable event. The value of the reinvested distribution is reported as income for the 2025 tax year, even though no cash was received. The primary source for these large year-end distributions is often realized capital gains, which occur when a fund manager sells securities that have appreciated in value. In Canada, 50% of this capital gain is taxable.

To prevent double taxation, the amount of the reinvested distribution is added to the investor's Adjusted Cost Base (ACB) for that ETF. A higher ACB reduces the capital gain (or increases the capital loss) realized when the investor eventually sells their units. Financial advisors consistently stress the importance of tracking these ACB adjustments to ensure accurate tax reporting.

"Investors in non-registered accounts need to be prepared for the tax bill that can accompany strong fund performance," noted one Toronto-based tax strategist. "These year-end estimates are the first signal to start planning, either by setting aside cash for taxes or considering tax-loss harvesting opportunities elsewhere in a portfolio."

A Golden Year: Unpacking the DXAU ETF's Explosive Payout

The standout figure in Dynamic's announcement is unquestionably the $8.745 per-unit distribution from the Dynamic Active Global Gold ETF (DXAU). For a fund that only launched in July 2024, this payout is a testament to both a surging gold market and the prescient stock selection of its active management team.

The fund's strategy focuses on global gold companies, from explorers to producers, and its performance has been remarkable, posting an average annual return of nearly 90% since its inception. This result is a direct reflection of the underlying value unlocked within its portfolio. The large distribution indicates that the fund's managers have taken significant profits by selling appreciated positions throughout the year.

A look at DXAU's top holdings as of late 2025 reveals a portfolio of high-performing gold equities. Major producers like Agnico Eagle Mines, Kinross Gold, and Northern Star Resources have benefited from a strong commodity price environment and operational execution. The fund also holds positions in growth-oriented companies such as Lundin Gold and promising explorers like Founders Metals, giving it exposure across the value chain.

The massive distribution from DXAU is therefore a direct consequence of its strategy in action: the fund realized substantial capital gains, which must now be distributed to unitholders. It serves as a powerful, if taxable, confirmation of the value generated within the global gold equity space over the past year.

Mining Opportunities ETF Reflects Broader Sector Health

While not as dramatic as its gold-focused counterpart, the $1.002 per-unit estimated distribution for the Dynamic Active Mining Opportunities ETF (DXMO) is also significant. This fund offers a more diversified approach, investing across a range of commodities and mining companies, not just precious metals. Its positive distribution suggests that the health of the mining industry in 2025 was not confined to gold alone.

This distribution reflects realized gains from a portfolio that likely includes base metals producers, critical mineral explorers, and other resource-related companies. For investors seeking to understand the financial performance of the broader materials sector, the DXMO distribution provides a concrete data point indicating a profitable year for active managers navigating the space. It suggests that companies involved in the energy transition, infrastructure development, and industrial production have also delivered strong returns, allowing the fund to realize gains and reward its investors.

Active Management's Double-Edged Sword

The substantial distributions from Dynamic's actively managed resource ETFs highlight a key difference compared to their passive, index-tracking cousins. Active managers have the flexibility to trade positions to capitalize on market opportunities, which can lead to superior returns. This higher portfolio turnover, however, is precisely what generates the realized capital gains that result in large, taxable year-end distributions.

In contrast, passive index ETFs typically have very low turnover, as they only buy or sell securities when the underlying index composition changes. This generally results in greater tax efficiency, as capital gains are not realized as frequently. The trade-off for investors is clear: the potential for outperformance with active funds often comes with a greater tax burden in non-registered accounts.

The growth of the active ETF market in Canada, where bank-owned firms like Dynamic's parent Scotiabank are major players, shows a clear investor appetite for strategies that aim to beat the market. Today's announcement from Dynamic serves as a critical annual reminder of the financial implications of that choice.

Investors should note that these figures are preliminary. Dynamic expects to release updated and final distribution amounts on or about December 19, 2025, ahead of the December 30 record date. These final numbers will be essential for finalizing year-end tax planning and accurately assessing portfolio performance.