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What are we looking for?

The biggest money-makers among Canadian-listed exchange-traded funds during the first quarter.

The screen

We looked at the top 15 performers for the three months ended March 31. U.S. dollar and duplicate versions of these low-fee funds were excluded. Leveraged ETFs, which allow investors to amplify long and short bets, as well as "inverse" ETFs that make short bets, were also not included.

What did we find?

It's getting brighter in the land of the rising sun.

While the U.S. equity market climbed nearly 11 per cent (in U.S. dollars) in the first three months of this year versus 3 per cent for its Canadian peer, Japanese stocks enjoyed an even better party.

Japan's Nikkei 225 Index, the main index tracking stocks in the world's third-largest economy, rose 20 per cent in yen terms. The benchmark has been gaining momentum since the December election of new Prime Minister Shinzo Abe. His economic policy supports aggressive monetary easing by Japan's central bank.

The iShares Japan Fundamental Index ETF, which tracks an index of stocks based on criteria such as dividends and free cash flow as opposed to market value, gained 20.4-per-cent in the first three months. The ETF is also hedged to Canadian dollars.

"Business sentiment in Japan was strong in the first quarter" with its central bank committed to a target of achieving 2-per-cent inflation, said Jeffrey Logan, head of iShares products at BlackRock Asset Management Canada Ltd. "The weakening yen was [also] a positive for Japanese exports."

Among the stocks tracked by the iShares Japan ETF, Sony Corp. was the biggest gainer with a 62-per-cent return followed by Mazda Motor Corp., up 52 per cent, and telecommunications equipment giant NEC Corp., rising 29 per cent.

Eight U.S. stock ETFs made the list of best performers. The iShare USA Minimum Volatility ETF topped the group with a 15.1-per-cent gain. This ETF tracks an index composed mainly of consumer staples, health care and information technology companies.