What are we looking for?
Exchange traded funds (ETFs) that did well in the third quarter. Given that stock markets took a drubbing, we looked for ETFs that came up smelling like roses.
We ranked the 15 biggest gainers among Canadian-listed ETFs, but excluded leveraged ETFs.
What did we find?
Gold, currency, bond and actively managed fund ETFs.
The unhedged version of Claymore Gold Bullion ETF led the pack with a 16-per-cent gain as gold surged to a record high of over $1,900 (U.S.) an ounce in September before retreating. Meanwhile, Horizons U.S. Dollar Currency ETF rose 8.6 per cent as the greenback strengthened as a safe-haven currency.
Long-term bonds did well with BMO Long Federal Bond ETF gaining 11.9 per cent. Its holdings benefited from the Bank of Canada decision to hold rates steady until next year, and got an additional boost from a "flight to quality" amid volatile stock markets, said Alfred Lee, investment strategist for BMO ETFs at Bank of Montreal.
HAP Seasonal Rotation ETF, which moves its assets among various sectoral ETFs to take advantage of recurring annual patterns in the market, rose 4.8 per cent. This actively managed ETF had a big chunk of its assets in cash, but made some money from short-term trades in gold and gold bullion ETFs. "As things started to deteriorate, we got rid of them," said Don Vialoux, a research analyst for JovInvestment Management Inc.
His ETF also held utilities and health care ETFs (which got hit in the market downturn) but made money by shorting - or selling - steel and transportation ETFs.
As the quarter ended, the ETF was nearly all in cash. Mr. Vialoux turned bullish on Oct. 5, and began investing again. Because markets have run up so fast, he is waiting to deploy his remaining 60-per-cent cash position after the "slight pullback" in the markets he expects as companies report third-quarter results.
HOW CANADIAN-LISTED ETFS FARED IN THE THIRD QUARTER OF 2011
|Assets||3-mo % rtn||YTD % rtn||Calendar year % rtn|
|Fund name||Ticker||Category||MER||($-mil)||(Sep. 30)||(Oct. 12)||2010||2009||2008|
|Claymore Gold Bullion ETF (Non-Hgd)||CGL.C-T||Misc. - Commodity||0.50||30.6||16.0%||n/a||n/a||n/a||n/a|
|BMO Long Federal Bond Index ETF||ZFL-T||Cdn Lng Trm Fxd Inc||0.20||13.8||11.9%||11.2%||n/a||n/a||n/a|
|PowerShares Ultra DLUX L-Term Gov't Bnd||PGL-T||Cdn Lng Trm Fxd Inc||0.28||n/a||10.4%||n/a||n/a||n/a||n/a|
|iShares DEX Long Term Bond Index||XLB-T||Cdn Lng Trm Fxd Inc||0.35||152.1||9.7%||8.8%||12.0%||5.3%||2.2%|
|Horizons U.S. Dollar Currency ETF||DLR-T||Misc. - Other||0.45||5.6||8.6%||n/a||n/a||n/a||n/a|
|iShares S&P/TSX Global Gold Index||XGD-T||Precious Metals Equity||0.55||1355.9||8.2%||-5.4%||26.0%||7.0%||1.0%|
|Horizons COMEX Gold ETF||HUG-T||Alternative Strategies||0.81||15.7||7.5%||17.0%||26.8%||n/a||n/a|
|Claymore Gold Bullion ETF||CGL-T||Misc. - Commodity||0.50||552.2||7.1%||18.7%||26.6%||n/a||n/a|
|BMO Long Corporate Bond Index ETF||ZLC-T||Cdn Lng Trm Fxd Inc||0.33||27.7||7.0%||7.0%||n/a||n/a||n/a|
|BMO Mid Federal Bond Index ETF||ZFM-T||Cdn Fixed Income||0.36||15.6||6.8%||7.5%||7.2%||n/a||n/a|
|iShares DEX All Government Bond Idx||XGB-T||Cdn Fixed Income||0.35||225.6||5.5%||5.5%||6.0%||1.2%||8.7%|
|iShares DEX Universe Bond Index||XBB-T||Cdn Fixed Income||0.30||1693.1||5.0%||5.1%||6.3%||5.0%||6.1%|
|iShares DEX Real Return Bond Index||XRB-T||Cdn Infl. Prot. Fxd Inc||0.35||685.4||4.8%||10.0%||10.6%||14.1%||0.0%|
|HAP Seasonal Rotation ETF||HAC-T||Alternative Strategies||1.07||44.7||4.8%||8.1%||14.5%||n/a||n/a|
|BMO Real Return Bond Index ETF||ZRR-T||Cdn Infl. Prot. Fxd Inc||0.25||16.1||4.6%||9.6%||n/a||n/a||n/a|
|S&P/TSX Total Return||-12.0%||-8.7%||17.6%||35.1%||-33.0%|
|S&P 500 Composite Total Return Idx($Cdn)||-7.2%||-0.4%||9.4%||8.1%||-21.9%|
|Source: Globe Investor, Bloomberg|
© 2007 The Globe and Mail. All rights reserved.
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