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Number Cruncher

Stock screens for investment ideas from professional investors. Exclusive to subscribers of Globe Unlimited.

(Getty Images/iStockphoto)
(Getty Images/iStockphoto)


Scouring for ETFs that mix growth, value Add to ...

What are we looking for?

Canadian exchange-traded funds (ETFs) that offer a good mix of growth, valuation and low fees.

How did we do it?

Our friend, Craig McGee, senior consultant at CPMS Morningstar Canada, began by selecting ETFs that focus on the Canadian stock market. These include funds in the following categories: Canadian equity, Canadian dividend and income equity, and Canadian small/mid-cap equity.

Using Morningstar Direct’s Scorecard tool, he ranked their holdings on the following six metrics:

  • average price-to-earnings ratio (for the trailing 12 months);
  • average price-to-book ratio;
  • average return on invested capital
  • average expected five-year annualized earnings growth rate
  • management fee
  • one-year total return (for the ETF itself)

His goal was to find baskets of stocks that, on average, offer growth at reasonable prices along with lower management fees and higher overall performance over the past year.

About Morningstar

Morningstar is a leading provider of independent investment research in North America, Europe, Australia and Asia. The company offers an extensive line of products and services for individuals, financial advisers and institutions.

Morningstar provides data on 422,000 investment offerings, including stocks, mutual funds and similar vehicles, along with real-time global market data on more than nine million equities, indexes, futures, options, commodities and precious metals, in addition to foreign exchange and treasury markets.

What we found

Only a few dozen ETFs exist in the categories that were surveyed, so take the results with a grain of salt. However, the funds that stand out on the half-dozen metrics we surveyed could offer decent choices for Canadian exposure as part of a complete portfolio.

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Canadian equity ETFs ranked by Morningstar Direct’s scorecard tool

Rank Name Ticker P/E Ratio
P/B Ratio
Growth %
Fee %
Rtn %
1 FirstAsset Mstar Canada Value ETF Comm FXM-T 13.84x 1.62x 7.31% 9.86% 0.60% 31.32%
2 FirstAsset Mstar NatlBankQuebec ETF Comm QXM-T 14.99x 2.40x 5.72% 10.95% 0.50% 27.26%
3 PowerShares FTSE RAFI Canadian Fnd ETF PXC-T 14.31x 1.62x 2.06% 8.46% 0.45% 15.42%
4 BMO Canadian Dividend ETF ZDV-T 15.24x 1.63x 3.93% 8.67% 0.35% 11.37%
5 BMO S&P/TSX Capped Composite Index ETF ZCN-T 14.81x 1.81x 3.82% 8.84% 0.15% 8.86%
6 iShares S&P/TSX SmallCap Index XCS-T 13.76x 1.22x 0.22% 21.26% 0.55% -0.89%
7 iShares S&P/TSX Capped Composite Index XIC-T 14.81x 1.81x 3.83% 8.84% 0.25% 8.72%
8 iShares S&P/TSX Completion Index XMD-T 15.00x 1.65x 3.85% 12.49% 0.55% 5.95%
9 FirstAsset Mstar Canada Momentum ETF Com WXM-T 15.72x 3.21x 9.69% 9.43% 0.60% 20.14%
10 Horizons S&P/TSX 60 Index ETF HXT-T 14.75x 1.87x 3.82% 8.07% 0.07% 9.87%
11 iShares MSCI Canada Min Volatility Index XMV-T 14.63x 2.02x 6.11% 8.17% 0.30% 8.62%
12 iShares S&P/TSX 60 Index XIU-T 14.75x 1.87x 3.82% 8.07% 0.15% 9.72%
13 Vanguard FTSE Canada Index ETF VCE-T 15.21x 1.80x 3.50% 8.47% 0.09% 9.56%
14 BMO Low Volatility Canadian Equity ETF ZLB-T 16.17x 2.28x 5.88% 8.36% 0.35% 21.36%
15 iShares CAN Fndmental Idx Common CRQ-T 14.31x 1.62x 2.05% 8.46% 0.65% 15.24%
16 iShares Jantzi Social Index XEN-T 14.04x 1.93x 5.11% 7.35% 0.50% 13.83%
17 iShares S&P/TSX Can Div Aristocrats Comm CDZ-T 15.77x 1.84x 7.42% 8.32% 0.60% 10.23%
18 iShares S&P/TSX Equity Income Index Fund XEI-T 13.35x 1.69x 2.62% 6.37% 0.55% 12.06%
19 Horizons S&P/TSX 60 Equal Weight ETF HEW-T 16.06x 1.69x 3.51% 9.03% 0.50% 7.48%
20 iShares DJ Canada Select Growth Index XCG-T 18.80x 2.40x 7.63% 11.07% 0.50% -0.77%

Source: Morningstar Direct


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