best growth etf canada

Top 10 Best Growth ETF so far in 2021 in Canada!

In this post we will review the Top 10 Best Growth ETF in Canada that are leading the pack so far this year! We have selected only ETFs that had the highest returns. Also, we limited ourselves to ETFs that have asset under management (AUM) above 100 millions dollars. ETFs with low AUM tend to be less liquid and cost more when trading because of the spread (the difference between the bid and ask price) is often high.

Please note, past performance does not guarantee future results. Always consult a financial advisor before making any financial decisions.

Best growth ETF: Asset under management and Management fee

NameMgmnt FeeAUM*
 XEG – Ishares S&P TSX
Capped Energy Idx
0.55%1,541
  ZEO – BMO S&P TSX Eql
Weight Oil Gas Index
0.55%169
  ZUB – BMO Eql Wgt
US Bank Hdgd To CAD
0.35%608
ZBK -BMO Equal
Weight US Bank
0.35%899
 NXF – CI First Asset
Energy Giants Cov Call 
0.65%211
 NXF-B – CI First Asset
Energy Giants  Unhedged
0.65%275
HCAL – Hamilton Can
Bank 1.25X Lvrg
0.65%221
 NGPE – Nbi Global
Private Equity
0.55%281
 FXM – CI First Asset
Morningstar Cda Value 
0.60%253
ZEB -BMO S&P TSX
Equal Weight Banks Indx
0.55%2,306
Source: Barchart – As of October 13th, * Asset under management in millions

Best growth ETF: performance table

Symbol1M
%Chg
YTD
%Chg 
 XEG21.7872.40
 ZEO11.3660.03
 ZUB7.5837.66
 ZBK5.6335.04
 NXF13.9033.33
 NXF-B11.5232.95
 HCAL3.1430.74
 NGPE-5.1330.18
 FXM4.3227.85
 ZEB1.9627.68
Source: Barchart – As of October 13th

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Highlights

Banking sector

News of faster economic growth than anticipated seem to favor the banking sector. Here we need to distinguish between two trends: large Banks and small-mid regional banks.

Large banks benefited from:

  • Trading: revenues are soaring from an exceptional year. Retail investors were abnormally active and trading much more than usual which increased commissions’ revenues for Banks;
  • Releasing large sums of money that were held in reserves to hedge against expected loan losses due to pandemic. These losses never materialized.

Small and regional Banks

Regional banks did not benefit from the increase witnessed in trading activities or investment banking. See below some factors that are pushing some investors to be bullish:

  • Loan growth should improve because most if not all covid-related support will cease in the second half of the year;
  • Rising interest rates is usually favourable for both attracting new deposits and providing high yielding loans;
  • Consumer spending is picking up and is expected to reach pre-pandemic levels before year end. This will benefit traditional baking segments;
  • Mergers and acquisitions rumours surrounding some attractively valued US regional banks.    

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Energy

Energy has strongly rebounded this year. This is especially true, as oil price has been benefiting the most from the expectation of swift global economic recovery buoyed by rapid vaccination rollout.

1) XEG – Ishares S&P TSX Capped Energy Index ETF XEG 

XEG comes in the first position in our ranking of the Best Growth ETF in Canada with 37% return so far this year. Funds objective: Seeks long-term capital growth by replicating the performance of the S&P/TSX Capped Energy Index, net of expenses.

In terms of holdings, Canadian Natural Resources and Suncor Energy make up almost 50% of the holdings. This high exposure reduces the benefit of diversification that’s usually desired by investors when buying an ETF.

The management fee is 0.55%.

XEG Morning star review

Rating: 2 out of 5.

Company NameAllocations
Canadian Natural Resources Ltd26.0%
Suncor Energy Inc23.0%
Cenovus Energy Inc12.7%
Tourmaline Oil Corp9.1%
Imperial Oil Ltd7.3%
ARC Resources Ltd6.0%
Whitecap Resources Inc2.8%
PrairieSky Royalty Ltd2.7%
Parex Resources Inc2.6%
Crescent Point Energy Corp2.3%
As of August 31st 2021

2) ZEO – BMO S&P TSX Eql Weight Oil Gas Index

The BMO Equal Weight Oil & Gas Index ETF (ZEO) has been designed to replicate, to the extent possible, the performance of the Solactive Equal Weight Canada Oil & Gas Index, net of expenses. The Fund invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index.

ZEO Morning star review

Rating: 3 out of 5.

Company NameAllocation
Tourmaline Oil Corp12.1%
Keyera Corp11.5%
Inter Pipeline Ltd10.1%
Enbridge Inc10.1%
Pembina Pipeline Corp10.0%
Imperial Oil Ltd9.9%
TC Energy Corp9.7%
Canadian Natural
Resources Ltd
9.5%
Cenovus Energy Inc9.2%
Suncor Energy Inc7.8%
As of August 31st 2021

3) ZUB – BMO Eql Wgt US Bank Hdgd To CAD

The BMO Equal Weight US Banks Hedged to CAD Index ETF (ZUB) has been designed to replicate, to the extent possible, the performance of the Solactive Equal Weight US Bank Index Canadian Dollar Hedged, net of expenses. The Fund invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index.

The U.S. dollar exposure is hedged back to Canadian dollars.

Weight (%)Name
99.53%BMO EQUAL WEIGHT US BANKS INDEX ETF (ZBK)
0.47%CASH

4) ZBK – BMO Equal Weight US Bank

BMO Equal Weight US Banks Index ETF has been designed to replicate, to the extent possible, the performance of the Solactive Equal Weight US Bank Index, net of expenses. The Fund invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index.

This ETF is not hedged.

Weight (%)Name
5.47%WELLS FARGO & CO
5.44%AMERIPRISE FINANCIAL INC
5.29%BANK OF AMERICA CORP
5.19%US BANCORP
5.18%FIRST REPUBLIC BANK/CA
5.13%GOLDMAN SACHS GROUP INC/THE
5.13%CITIZENS FINANCIAL GROUP INC
5.04%FIFTH THIRD BANCORP
5.04%KEYCORP
5.03%PNC FINANCIAL SERVICES GROUP INC/THE

5-6) NXF and NXF-B – CI First Asset Energy Giants Cov Call

NXF is an actively managed ETF and it invests in the largest energy companies listed in North American stock exchange. The Fund’s investment objective is to provide :

  • quarterly cash distributions;
  • capital appreciation by investing on an equal weight basis in a portfolio of equity securities of at least the 15 largest energy companies measured by market capitalization;
  • lower volatility of returns;
  • liquidity of the issuers’ equity securities and their related call options.

NXF is a currency hedged ETF. Whereas, NXF-B is not hedged against currency risk.

Name%
PETROLEO BRASILEIRO SA8.10
CANADIAN NATURAL RESOURCES LTD7.57
SUNCOR ENERGY INC7.40
EOG RESOURCES INC7.38
EQUINOR ASA7.17
CONOCOPHILLIPS6.70
BP PLC6.58
EXXON MOBIL CORP6.43
ENI SPA6.39
OCCIDENTAL PETROLEUM CORP6.31
CHEVRON CORP6.27
PIONEER NATURAL RESOURCES CO6.19
TOTAL SE6.18
ECOPETROL SA5.92
ROYAL DUTCH SHELL PLC5.85

7) HCAL – Hamilton Canadian Bank 1.25X Lvrg

The fund invests in HCA — which is designed to closely track the returns of the Solactive Canadian Bank Mean Reversion Index TR, investing in Canadian banks — while adding 25% leverage provided by a Canadian financial institution.

HCAL offers exposure to Canada’s “Big Six” banks with 25% leverage. The fund does not use derivatives.

Royal Bank of Canada27%
Toronto-Dominion Bank27%
Bank of Nova Scotia27%
Canadian Imperial Bank of Commerce7%
Bank of Montreal7%
National Bank of Canada7%
As of June 30th

8) NGPE – Nbi Global Private Equity ETF

The NBI Global Private Equity ETF’s investment objective is to replicate the Morningstar® PitchBook Developed Markets Listed Private Equity Select Index (or any successor thereto). The purpose of this index is to generate long-term capital growth.

Company NameAllocations
Blackstone Group Inc8.4%
KKR & Co Inc
Ordinary Shares
8.2%
Partners Group Holding AG7.8%
T. Rowe Price Group Inc7.6%
3i Ord6.6%
Apollo Global
Management Inc Class A
4.7%
EXOR NV4.2%
EQT AB Ordinary Shares4.0%
Intermediate Capital Group PLC3.8%
Kinnevik AB B2.9%
As of August 31st 2021

9) FXM – CI First Asset Morningstar Cda Value ETF

FXM seeks to replicate the performance of the Morningstar® Canada Target Value IndexTM

The index is managed by Morningstar a leading research firm. It’s comprised of equities of Canadian companies displaying low price to earnings, price to cash flow, price to book value, and price to sales ratios in comparison to their industries’ averages. Emphasis is also placed on stocks experiencing upward revisions of fiscal earnings estimates.

NameWeight %
VERMILION ENERGY INC4.53
CRESCENT POINT ENERGY CORP3.95
ARC RESOURCES LTD3.88
WEST FRASER TIMBER CO LTD3.66
INTERFOR CORP3.61
CANFOR CORPORATION NEW3.45
WESTSHORE TERMINALS INVT CORP3.44
MAGNA INTL INC3.35
LOBLAW COMPANIES LTD3.31
EQUITABLE GROUP INC3.30
As of October 13th

10) ZEB – BMO S&P TSX Equal Weight Banks Index ETF

The BMO Equal Weight Banks ETF has been designed to replicate, to the extent possible, the performance of the Solactive Equal Weight Canada Banks Index, net of expenses. The index includes the major Canadian banks with a balanced allocation as you can see in the composition of the portfolio below.

Holding details as of May 13th

Weight (%)Name
17,18%BANK OF MONTREAL
16,90%TORONTO-DOMINION BANK/THE
16,78%CANADIAN IMPERIAL BANK OF COMMERCE
16,59%NATIONAL BANK OF CANADA
16,50%ROYAL BANK OF CANADA
15,86%BANK OF NOVA SCOTIA/THE
0,19%CASH

No longer in the top 10 

HMMJ-U – Horizons Marijuana Life Sciences  

HMMJ invests mainly in a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry. Their largest holdings are Aphria Inc and Canopy Growth Corp. This ETF is rebalanced on a quarterly basis to adapt to the ever changing nature of this industry.

HMMJ.U is a US $ denominated ETF.

AS AT MAY 28, 2021

Security NameWeight %
TILRAY INC CL 219.22
CANOPY GROWTH CORP .12.15
CRONOS GROUP INC .11.15
INNOVATIVE INDUSTRIAL PROPERTI .9.71
SCOTTS MIRACLE-GRO CO/THE .9.15
JAZZ PHARMACEUTICALS PLC .4.18
GROWGENERATION CORP .3.98
CHARLOTTES WEB HOLDINGS INC .3.6
HYDROFARM HOLDINGS GROUP INC .3.54
VILLAGE FARMS INTL INC .2.99

HMMJ – Horizons Marijuana Life Sciences  

HMMJ invests mainly in a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry. Their largest holdings are Aphria Inc and Canopy Growth Corp. This ETF is rebalanced on a quarterly basis to adapt to the ever changing nature of this industry.

AS AT MAY 28, 2021

Security NameWeight
TILRAY INC CL 219.22%
CANOPY GROWTH CORP .12.15%
CRONOS GROUP INC .11.15%
INNOVATIVE INDUSTRIAL PROPERTI .9.71%
SCOTTS MIRACLE-GRO CO/THE .9.15%
JAZZ PHARMACEUTICALS PLC .4.18%
GROWGENERATION CORP .3.98%
CHARLOTTES WEB HOLDINGS INC .3.6%
HYDROFARM HOLDINGS GROUP INC .3.54%
VILLAGE FARMS INTL INC .2.99%

XBM – Ishares S&P TSX Global Base Mtls ETF

XBM Seeks to provide long-term capital growth by replicating the performance of the S&P/TSX Global Base Metals Index, net of expenses. The index is comprised of businesses involved in the production or extraction of base metals.

Holdings as of Jul 8, 2021

NameWeight (%)
BHP GROUP AMERICAN DEPOSITORY SHAR10.51
BHP GROUP ADR LTD10.38
RIO TINTO ADR REPTG ONE PLC10.09
FIRST QUANTUM MINERALS LTD9.74
FREEPORT MCMORAN INC9.19
TECK RESOURCES SUBORDINATE VOTING8.15
ALCOA CORP5.18
LUNDIN MINING CORP4.56
SOUTHERN COPPER CORP4.20
VEDANTA ADR REPRESENTING LTD3.49

RBNK – RBC CDN Bank Yield Index

RBC Canadian Bank Yield Index ETF seeks to replicate the Solactive Canada Bank Yield Index. The latter is focused only on the Canadian banking industry.

HoldingsAssets
CANADIAN IMPERIAL BANK OF COMMERCE26.7%
BANK OF NOVA SCOTIA23.7%
ROYAL BANK OF CANADA17.1%
TORONTO-DOMINION BANK15.6%
BANK OF MONTREAL8.5%
NATIONAL BANK OF CANADA8.4%
As of July 22nd

FSF – CI First Asset Global Financial Sector ETF

The Fund’s investment objectives are to seek long-term total returns consisting of long-term capital appreciation and regular dividend income from an actively managed portfolio composed primarily of securities of issuers in the global financial services sector across developed and emerging markets.

Name%
SYNCHRONY FINANCIAL9,75
CITIGROUP INC9,62
ING GROEP NV7,90
BURFORD CAPITAL LTD6,09
CONDUIT HOLDINGS LTD4,46
EQUITABLE HOLDINGS INC4,43
EAST WEST BANCORP INC4,24
ATHENE HOLDING LTD3,96
MONETA MONEY BANK AS3,91
MANULIFE FINANCIAL CORP3,76

XIT – iShares S&P TSX Capped Info Tech

This  seeks exposure to the Canadian information technology companies. The index used is the S&P/TSX Capped Information Technology Index.

see below their top holdings

NameWeight %
SHOPIFY SUBORDINATE VOTING INC CLA30,19
CONSTELLATION SOFTWARE INC21,50
CGI INC14,36
OPEN TEXT CORP9,87
LIGHTSPEED POS SUBORDINATE VOTING5,48
DESCARTES SYSTEMS GROUP INC4,23
BLACKBERRY LTD3,74
NUVEI SUBORDINATE VOTING CORP3,11
KINAXIS INC2,51
ENGHOUSE SYSTEMS LTD1,30
As of July 23rd

ZID – BMO India Equity Index

The BMO Indian Equity ETF provides exposure to the Indian market which is one of the most promising emerging markets. The fund acquires certificates (ADRs) from major Indian companies listed on the Toronto, London and New York stock exchanges (NYSE and NASDAQ).

ZID sector allocation – Top 3

45.20% Financial Services

20.62% Technology

14.39% Energy

ZID Holdings

Weight
(%)
Name
15,64%ICICI BANK LTD
15,53%INFOSYS LTD
14,39%RELIANCE INDUSTRIES LTD
13,82%HDFC BANK LTD
8,50%LARSEN & TOUBRO LTD
8,02%AXIS BANK LTD
7,72%STATE BANK OF INDIA
3,92%WIPRO LTD
3,91%MAHINDRA & MAHINDRA LTD
3,01%DR REDDY’S LABORATORIES LTD

VRE – Vanguard FTSE CDN Capped REIT Index ETF

VRE Seeks to track the performance of the FTSE Canada All Cap Real Estate Capped 25% Index (before fees and expenses). It provides exposure to Canadian large-, mid-, and small-cap stocks in the Real Estate industry.

Vanguard FTSE CDN Capped REIT Index ETF has the lowest MER among the ETFs selected for this post.

VRE ETF Holdings

Company NamesAllocations
Canadian Apartment Properties15.8%
FirstService Corp13.0%
Riocan10.6%
Allied Properties 8.5%
Colliers International Group Inc7.5%
Granite 7.4%
H&R 7.0%
1st Cap Realty5.8%
SmartCentres 5.8%
Choice Properties 5.6%
As of August 31st 2021

Sector allocation

SectorFund
Retail REITs23.2%
Office REITs19.6%
Real Estate Services18.1%
Residential REITs17.7%
Diversified REITs9.0%
Industrial REITs7.7%
Real Estate Holding and Development4.6%
Total100.0%

XRE – Ishares S&P TSX Capped REIT Index ETF

Seeks to provide long-term capital growth by replicating the performance of the S&P/TSX Capped REIT Index, net of expenses.

XRE ETF Holdings

NameWeight %
CANADIAN APARTMENT PROPERTIES REAL15.27
RIOCAN REAL ESTATE INVESTMENT TRUS10.38
ALLIED PROPERTIES REAL ESTATE INVT8.81
GRANITE REAL ESTATE INVESTMENT STA7.77
HANDR REAL ESTATE INVESTMENT TRUST7.06
CHOICE PROPERTIES REAL ESTATE INVE5.97
FIRST CAPITAL REALTY REAL ESTATE I5.88
SMARTCENTRES RL ESTATE INVESTMENT5.73
SUMMIT INDUSTRIAL INCOME REIT UNIT4.01
DREAM INDUSTRIAL REAL ESTATE INVES3.61
as of Jun 17, 2021

Sector allocation

TypeFund
Retail REIT’s32.24
Residential REIT’s24.26
Industrial REIT’s18.27
Diversified REIT’s11.64
Office REIT’s10.18
Health Care REIT’s3.26
Cash and/or Derivatives0.16
as of Jun 17, 2021

Disclaimer

The data on this website is for your information only. It does not constitute investment advice, or advice on tax or legal matters. Any information provided on this website does not constitute investment advice or investment recommendation nor does it constitute an offer to buy or sell or a solicitation of an offer to buy or sell shares or units in any of the investment funds or other financial instruments described on this website. Should you have any doubts about the meaning of the information provided herein, please contact your financial advisor or any other independent professional advisor.

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