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A rough ride for resource, emerging market ETFs

swon@globeandmail.com

WHAT ARE WE LOOKING FOR?

Leaders and laggards among ETFs coming out the gate.

Many stock markets have slipped into the red since the start of 2010 after last year's recovery from the worst bear market since the 1930s. The debt crisis in Greece has caused anxiety among some investors.

TODAY'S SEARCH

We asked Victor Tan, fund analyst at Globe Investor, to screen for the best- and worst-performing Canadian-listed exchange-traded funds this year until Thursday.

We included the iShares, Claymore, BMO and Horizons AlphaPro actively managed ETFs. We excluded the Horizons BetaPro bull and bear and inverse (short) ETFs.

WHAT DID WE FIND?

Leadership is coming from technology, income trust and various bond ETFs.

The iShares CDN Tech ETF, which owns five stocks, gained 7 per cent. Open Text Corp. and Research In Motion, which each represent more than 20 per cent of the fund, "performed strongly over the last month," said Oliver McMahon, director of product management at iShares Canada.

The iShares CDN Income Trust ETF, which climbed 4 per cent, outperformed in first few weeks of 2010 as the broader market fell back on fears of a longer recovery from a global recession, he added.

Among laggards, resource and emerging markets ETFs have had a rough ride.

Claymore Natural Gas Commodity ETF continued its slide from 2009 as gas prices, which have fallen since the summer of 2008, remain in a slump. The ETF shed nearly 15 per cent after a 61-per-cent decline last year.

The iShares CDN Gold Sector ETF is off 7 per cent as the price of the metal has fallen off from a record high over $1,200 (U.S.) per ounce in December. Barrick, Goldcorp and Newmont make up around 46 per cent of the fund.

Claymore BRIC ETF, which is 96-per-cent invested in Brazil, China and India, lost nearly 7 per cent. Brazil, which represents 56 per cent of the ETF, was a drag on the fund because its market lost ground, while currency conversion also had an impact, said Vlad Tasevski, analyst at Claymore Investments Inc.

HAP (Horizon AlphaPro) Managed S&P/TSX 60 ETF, which is run like a stock-picking mutual fund as opposed to tracking an index, lost 3 per cent.

For the year ended Jan. 31, that actively managed ETF gained 6.6 per cent versus 24 per cent for S&P/TSX 60 index.

Stocks for this ETF were chosen over the past year by technical analyst Ron Meisels, who also writes for The Globe. Early last month, Frank Mersch and Prakash Hariharan of Front Street Investment Management Inc. took over the stock-picking job.

***

How ETFs are faring so far this year Assets
Top 15 ETFs* At Jan./10LatestYTDCalendar year returns
NameSymbolCategory($ mlns)MERFeb. 2520092008200720062005
iShares CDN Tech Sector IndexXITSci/Tech Eq64.20.557.05%52.4%-49.1%10.7%32.7%-13.5%
iShares CDN Income Trust XTRCdn Inc Trust223.00.554.02%40.4%-25.9%6.0%-3.2%
Claymore US non-hedgedCLUU.S. Eq86.40.702.62%
iShares CDN L-T BondXLBCdn L-T Fix Inc67.00.352.54%5.3%2.2%2.9%
iShares CDN Corp. Bond IndexXCBCdn Fix Income1245.70.402.37%15.1%-0.6%1.2%
iShares CDN REIT IndexXREReal Est. Equity951.70.552.04%53.2%-38.3%-6.0%26.8%24.3%
iShares CDN Compl. IndexXMDCdn Equity158.30.551.85%46.4%-38.8%5.3%17.8%21.3%
Claymore Adv. CDN Bond ETFCABCdn Fix Inc38.51.84%
iShares CDN Bond IndexXBBCdn Fix Inc1393.30.301.83%5.0%6.1%3.3%3.8%6.1%
iShares CDN Govt Bond IndexXGBCdn Fix Inc148.10.351.63%1.2%8.7%4.1%
BMO Short Corp. Bond IndexZCSCdn S-T Fix Inc15.21.52%
BMO Cdn Govt Bond ETFZGBCdn Fix Inc3.01.49%
Claymore 1-5 Yr Corp. BondCBOCdn Fixed Inc570.11.35%
iShares CDN Sht Bond IndexXSBCdn S-T Fix Inc.1651.90.251.23%4.3%8.0%3.7%3.8%3.0%
BMO Short Prov. Bond IndexZPSCdn S-T Fix Inc.13.61.21%
Bottom 15 ETFs*
Claymore Nat Gas CommodGASMisc.254.40.92-14.69%-61.3%
Claymore Intl Index ETFCIEIntl Equity101.50.62-7.23%15.6%-30.8%
Claymore BRIC ETFCBQEm Mkt Equity312.70.66-6.76%75.0%-57.6%70.9%
Claymore Broad Emer. Mkt CWOEm Mkt Equity52.50.46-6.08%
iShares CDN MSCI Emer. MktXEMEm Mkt Equity101.40.10-5.51%
BMO Emerging Mkt EqZEMEm Mkt Equity10.1-5.19%
Claymore Oil Sands ETFCLONat. Res. Equity37.60.63-4.76%59.0%-54.2%22.7%
iShares CDN Energy IndexXEGNat. Res. Equity831.50.55-4.67%40.3%-35.9%10.6%4.0%60.6%
BMO S&P/TSX Gbl Base MtlsZMTNat. Res. Equity10.1-4.59%
iShares CDN Gold Sector XGDPrec. Metals Eq1030.30.55-3.62%7.0%1.0%-4.5%40.8%21.7%
Claymore S&P/TSX Gbl Mng CMWPrec. Metals Eq56.30.59-3.49%54.3%-38.8%
Claymore Gbl Mthly Adv. Div.CYHCdn Sm/Mid Cap67.10.64-3.47%47.1%
BMO Intl Equity Index ETFZDMIntl Equity10.2-3.42%
Claymore S&P Global WaterCWWMisc.38.30.64-3.19%11.0%-24.2%
HAP S&P/TSX 60 ETFHAXAlt. Strategies-3.01%
DEX Universe Bond Ttl Ret5.4%6.4%3.7%4.1%6.5%
MSCI World ($ Cdn)11.8%-26.1%-7.1%20.6%6.6%
S&P/TSX Total Return-0.6%35.1%-33.0%9.8%17.3%24.1%
Note: * as of Feb. 25, 2010
Source: Globe Investor, company

© 2007 The Globe and Mail. All rights reserved.

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