What are we looking for?
Stars and dogs among Canadian-listed exchange-traded funds.
We screened for the eight best and eight worst performers for the first quarter of this year. Leveraged bull and bear ETFs were excluded.
What did we find?
Hot silver and energy ETFs emerging as stars, while India ETFs were among the dogs.
Surging silver prices helped HBP Comex Silver ETF lead the pack with a 22.2-per-cent gain. This fund, which tracks silver futures, was also the top performer last year with a 77-per-cent return.
BMO Junior Gas ETF, which follows an index of North American stocks, was a close second. It rose 18.5 per cent in the quarter, and has gained 58 per cent since inception last May. Its strong return may seem odd given that gas prices are going nowhere, while soaring oil prices helped BMO Junior Oil ETF rise 17.7 per cent.
Alfred Lee, an investment strategist at BMO ETFs, said the gas juniors, however, are more closely tied to liquid-rich" gas versus regular gas. "Companies in this space could be profitable even at really low natural gas prices," he said. Shares of gas juniors, he added, may also be fuelled by takeover speculation.
Among the dogs, HBP NYMEX Long Gas/Short Oil ETF fared the worst with a 13.7-per-cent drop. This alternative strategy ETF is for investors who want to bet that gas will outperform oil. That didn't happen in the first quarter as gas future contracts fell 3.1 per cent, while oil futures advanced 10 per cent. However, the HBP NYMEX Long Oil/Short Gas ETF rose 10 per cent.
BMO India Equity Hedged ETF and iShares S&P CNX Nifty India ETF lost 8.3 per cent and 6.3 per cent, respectively, as the Indian markets were roiled on concerns about inflation and rising interest rates. Global fund flows have been bailing out of emerging markets such as India for greener pastures in developed countries like the United States so that could be a headwind this year, BMO's Mr. Lee said.
The Indian markets rebounded strongly during the last week of March, but that rally was likely driven by buying based on bullish signals from technical analysis, he said. "I wouldn't be surprised to see India outperform over the next several weeks." That could be temporary though.