What are we looking for?
Investors will soon be staring down the final quarter of the year. Let's take a look at which exchange-traded funds have offered the best performance in 2013 so far.
We searched all categories for the 15 ETFs with the best performance for the year to Aug. 31. We omitted leveraged ETFs, which use derivatives to amplify the long or short returns, as well short or "inverse" ETFs that take bets against the market.
What did we find?
The top performing ETF in the chart was helped by major Japanese automotive and technology companies.
The Canadian hedged iShares Japan Fundamental Index ETF gained 46.8 per cent in the first eight months of the year.
"We continue to see opportunities with currency hedged positions in Japan. Encouraging monetary policy and a weaker yen provide a positive outlook for the Japanese economy," said Jeff Logan, head of iShares products at BlackRock Asset Management Canada Ltd.
"Japan now has a united government that we expect will allow Prime Minister [Shinzo] Abe to move ahead with bold reform. This should re-energize the private sector and improve productivity," he said.
The ETF's current top holding is Toyota Motor Corp., but other auto makers and their affiliated financing businesses also appear in the top 10, including Mitsubishi UFJ Financial Group Inc. and Honda Motor Co. Ltd.
But broad gains in Japanese markets and a softer yen weren't the only factors driving performance so far this year, and ETFs from other hot sectors this year are also represented in the chart - from health care to technology, U.S. banks to Chinese equities.
The second-best performing fund for the year to Aug. 31 was the BMO Junior Gas Index ETF, up 30.7 per cent. It is currently weighted toward some high-performing stocks such as Gulfport Energy, which was up 54 per cent in the year to the end of August.
CANADIAN ETFS, EIGHT MONTHS TO AUG. 31, 2013
|% return (Aug. 31)||% return||Assets|
|iShares Japan Fundament Idx (CAD-Hgd) Com ETF||CJP-T||46.8%||59.2%||-6.0%||15.4%||-19.6%||-1.9%||1.9%||-46.7%||0.72||57.3||Japanese Equity|
|BMO Junior Gas Index ETF||ZJN-T||30.7%||32.7%||-11.1%||2.2%||0.62||8.3||Natural Res. Equity|
|BMO Equal Weight US Banks (CAD-Hgd) Index ETF||ZUB-T||30.0%||32.8%||33.1%||-26.9%||0.40||147.6||Financial Svcs. Equity|
|iShares S&P/TSX Cap Info Tech Idx ETF||XIT-T||27.9%||44.4%||-0.4%||4.1%||6.6%||-20.5%||4.1%||52.4%||-49.1%||0.61||28.8||Misc. - Sector Equity|
|BMO Equal Weight US Health Care (CAD-Hgd) Idx ETF||ZUH-T||26.4%||31.1%||21.3%||4.1%||0.40||41.7||Health Care Equity|
|PowerShares S&P 500 High Beta (CAD Hgd) ETF||UHB-T||24.7%||29.8%||0.38||3.0||U.S. Equity|
|Vanguard S&P 500 Index ETF||VFV-T||24.2%||0.18||190.2||U.S. Equity|
|iShares Russell 2000 Idx (CAD-Hgd) ETF||XSU-T||24.2%||26.1%||5.2%||16.2%||-5.6%||25.2%||24.5%||-38.8%||0.36||158.5||U.S. Sml/MdCap Equity|
|iShares S&P/TSX Cap Consumer Staples ETF||XST-T||24.1%||26.4%||21.4%||0.62||29.1||Misc. - Sector Equity|
|BMO S&P 500 Index ETF||ZSP-T||23.6%||0.17||660.6||U.S. Equity|
|BMO China Equity Index ETF||ZCH-T||22.9%||30.0%||9.2%||-26.4%||0.74||10.9||Greater China Equity|
|BMO Junior Oil Index ETF||ZJO-T||22.6%||25.2%||-2.7%||-3.9%||0.62||14.3||Natural Res. Equity|
|iShares S&P Global Healthcare (CAD-Hgd) ETF||XHC-T||22.6%||27.0%||17.3%||0.65||50.6||Health Care Equity|
|Horizons S&P 500 Index (CAD-Hgd) ETF||HXS-T||21.4%||23.0%||16.0%||0.9%||0.16||61.2||U.S. Equity|
|PowerShares FTSE RAFI US (CAD-Hgd) ETF||PXU-T||21.3%||25.0%||0.57||112.6||U.S. Equity|
|S&P/TSX Total Return||5.9%||9.3%||1.3%||8.1%||7.2%||-8.7%||17.6%||35.1%||-33.0%|
|S&P 500 Composite Total Return Idx($Cdn)||24.2%||26.1%||10.5%||4.8%||15.7%||7.3%||12.2%||13.7%||-25.8%|
© 2007 The Globe and Mail. All rights reserved.
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