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Number Cruncher

Quick off the mark: January’s leading ETFs Add to ...

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.

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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.

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Leading Canadian-listed ETFs for January

Fund Ticker YTD % rtn
(Jan. 31)
2012
% rtn
iShares S&P/TSX Capped Info Tech Idx ETF XIT-T 10.0% 5.3%
iShares Japan Fundamental Idx (CAD-Hgd) Common ETF CJP-T 9.4% 15.4%
BMO Equal Weight US Health Care (CAD-Hgd) Idx ETF ZUH-T 7.9% 21.3%
PowerShares S&P 500 High Beta (CAD Hdg) ETF UHB-T 7.8%
iShares Global Infrastructure Idx-Common ETF CIF-T 7.3% 9.1%
BMO India Equity Index ETF ZID-T 7.3% 21.7%
iShares S&P CNX Nifty India Index ETF XID-T 7.2% 20.7%
iShares Global Agriculture Idx-Common ETF COW-T 7.1% 16.0%
iShares Russell 2000 Idx (CAD-Hgd) ETF XSU-T 7.0% 14.4%
iShares S&P Global Healthcare (CAD-Hgd) ETF XHC-T 7.0% 16.6%

Source: Lipper

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