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A roaring start to 2013: January's leading ETFs

swon@globeandmail.com

What are we looking for?

Biggest gainers out of the gate among Canadian-listed exchange traded funds. With most stock markets in positive territory last month, let's see how the ETFs are doing.

The screen

We ranked the top 15 performers for January. Leveraged ETFs, which allow investors to amplify their long or short bets, were excluded as well as short or "inverse" ETFs.

What did we find?

January's ETF star was helped by CGI Group Inc. and Research In Motion Ltd.

The iShares S&P/TSX Capped Information Technology ETF emerged as the top performer with a 10-per-cent gain. With CGI and RIM, respectively representing 27 and 22 per cent of the fund at month's end, investors need to keep in mind that this ETF is largely a play on the heavyweights. (The ETF only tracks 7 firms.)

Shares of information technology services provider CGI, whose first-quarter revenue beat analysts' expectations, were the biggest contributor to the ETF's performance. Last Thursday, CGI shares hit an intraday 52-week high of $27 a share.

RIM, which is beginning to do business under the BlackBerry name, saw its shares surge last month to a 52-week high of $18.53 a share. But the gain became more muted as it stock tumbled to close the month at $12.97 when last week's launch of the BlackBerry 10 smartphone underwhelmed analysts.

The iShares Japan Fundamental Index ETF (hedged to Canadian dollars) rose nearly 9.4 per cent. The performance stems from a rebounding Japanese market, which has been in bear territory for more than two decades, and currency hedging. It was the "best January performance in 15 years," said Jeff Logan, head of iShares products at BlackRock Asset Management Canada Ltd.

"Stock prices are up about 20 per cent over the past 12 months," he added. "The new prime minister of Japan recently announced a significant stimulus package, which is expected to bode well for short-term Japanese growth. Japanese exporters will see a benefit as emerging markets, such as China, improve in 2013."

Despite more optimism, the jury is still out as to whether this rally in Japan will be longer-lasting or fizzle once again.

*****

TOP-PERFORMING CANADIAN-LISTED ETFS IN JANUARY

YTD
% return% returnAssets
FundTicker(Jan. 31)20122011201020092008CategoryMER($-mil)
iShares S&P/TSX Capped Info Tech Idx ETFXIT-T10.0%5.3%-20.5%4.1%52.4%-49.1%Misc. - Sector Equity0.6127.1
iShares Japan Fundamental Idx (CAD-Hgd) Common ETFCJP-T9.4%15.4%-19.6%-1.9%1.9%-46.7%Japanese Equity0.7210.7
BMO Equal Weight US Health Care (CAD-Hgd) Idx ETFZUH-T7.9%21.3%4.1%Health Care Equity0.4014.7
PowerShares S&P 500 High Beta (CAD Hdg) ETFUHB-T7.8%U.S. EquityN/A3.6
iShares Global Infrastructure Idx-Common ETFCIF-T7.3%9.1%-2.6%9.2%12.3%Global Equity0.7313.1
BMO India Equity Index ETFZID-T7.3%21.7%-35.4%Misc. - Geog. Equity0.749.9
iShares S&P CNX Nifty India Index ETFXID-T7.2%20.7%-35.2%Misc. - Geog. Equity0.9933.3
iShares Global Agriculture Idx-Common ETFCOW-T7.1%16.0%-10.6%17.9%24.0%-27.3%Misc. - Sector Equity0.73215.6
iShares Russell 2000 Idx (CAD-Hgd) ETFXSU-T7.0%14.4%-5.6%25.2%24.5%-38.8%U.S. Sml/MdCp Equity0.3690.8
iShares S&P Global Healthcare (CAD-Hgd) ETFXHC-T7.0%16.6%Health Care Equity0.6414.3
iShares China Index ETFXCH-T6.6%11.2%-15.9%Greater China Equity0.8626.3
iShares S&P US Dividend Growers Idx ETFCUD-T6.5%13.7%U.S. Equity0.67160.0
PowerShares FTSE RAFI US Fundament (CAD-Hgd) ETFPXU-T6.2%U.S. Equity0.5680.5
iShares US Fundament Idx- (CAD Hdg) Common ETFCLU-T6.1%20.1%-1.5%16.7%28.5%-42.6%U.S. Equity0.72121.5
First Asset Morningstar US Dividend Target 50 ETFUXM-T6.1%Canadian Equity0.6617.6
S&P/TSX Total Return2.3%7.2%-8.7%17.6%35.1%-33.0%
S&P 500 Composite Total Return Idx($Cdn)5.4%13.5%4.4%9.4%8.1%-21.9%
Source: Lipper

© 2007 The Globe and Mail. All rights reserved.

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