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number cruncher

What are we looking for?

Biggest gainers out of the gate among Canadian-listed exchange-traded funds.

Bond ETFs were among the big stars in 2011 as investors fretted about the euro-zone debt crisis and a slowing Chinese economy. Let's see what's hot this year.

The screen

We ranked the top performers from the start of the year to Feb. 15. Leveraged ETFs, which allow investors to amplify their short or long bets on a market, were excluded.

What did we find?

The re-emergence of emerging markets ETFs.

Eight of the top 15 biggest movers were either India, China or Brazil-focused ETFs, or broader emerging market funds. It's quite a turnaround from last year when these ETFs were in the doghouse.

The iShares S&P CNX Nifty India ETF led the emerging-market pack with a 26.5-per-cent gain followed by BMO India Equity Hedged ETF , up 22.6 per cent.

Emerging markets have outperformed because their central banks have either reduced or are expected to reduce borrowing costs, said Alfred Lee, an investment strategist with BMO ETFs at Bank of Montreal. "India is one of the countries that is expected to lower interest rates, and this is obviously positive for equity markets."

There has also been "an increased appetite for risk among global investors" now that the European Central Bank has calmed fears about a bank panic, Mr. Lee said. It is offering euro-zone financial institutions massive amounts of funding under its Long-Term Refinancing Operation (LTRO).

Claymore China ETF , which has a lot of smaller companies in its portfolio, climbed 17 per cent. It has benefited from a small-cap rally this year after some of its equity holdings were pummelled at year-end from "window dressing" by fund managers who sell stocks with large losses.

The appetite for risk is also evident by the 14.4-per-cent gain in the iShares S&P/TSX Venture ETF , which is dominated by junior mining and energy stocks.

HBP NYMEX Long Oil/Short Gas ETF has benefited from high oil and falling natural gas prices. An oversupply of gas combined with warm weather in parts of North America has hurt the commodity. Horizons COMEX Silver ETF has been lifted by the rising price of the "poor man's gold."