Exchange-traded funds, commonly known as just ‘ETFs’, are often considered to provide a wider, more flexible investment option with its portfolio diversification and increased control over risk management.
The Toronto Stock Exchange (TSX) is said to have over a 1,000 listed ETFs. Much like stocks, an ETF is generally measured based on its returns and the costs involved. Its performance is also dependent on the stocks/indices it tracks and the window available to manage risk.
Based on these parameters, let us look at some top performing ETFs listed on TSX.
BMO S&P/TSX Capped Composite Index ETF (TSX:ZCN)
This exchange-traded fund mirrors the S&P/TSX Capped Composite Index, tracking over 200 equities. The ETF has a diversified coverage because of the range of sectors covered through the benchmark index.
It has assets worth C$ 6.5 billion under its management, with a 0.05 per cent management fee. The ETF also invests in Latin America, US and Asia/Pacific region.
This BMO ETF has 100 per cent equity holdings, with financials having the largest sectoral share, corresponding with the benchmark index’s composition.
Offering one of the highest returns to unitholders, this ETF grew 33.86 per cent in the last one year, while it saw a 10.3 per cent growth in the last five years.
It is priced at C$ 27.24 per unit, as per June 24, 2021, slightly lower than its 52-week high of C$ 27.41.
Horizons S&P/TSX 60 Index ETF (TSX:HXT)
This ETF mirrors the S&P/TSX 60 Index, which represents 60 market leaders of key industries. These companies particularly have large market caps. The ETF, managed by Horizons ETF, has about C$ 2.66 billion assets under management.
The fund family charges a 0.03 per cent management fee.
Its six-month returns were at 17.03 per cent, while it grew 32.8 per cent in the last one year. This ETF’s growth has been notable at 10.9 per cent in the last five years.
Its units currently trade at C$47.05 on the TSX and have an 18.90 price-to-earnings (P/E) ratio. The fund’s beta coefficient, which highlights a security’s volatility, is 0.95.
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Harvest Healthcare Leaders Income ETF (TSX:HHL)
With over 90 per cent of its investment in the healthcare sector, Harvest Healthcare Leaders Income ETF has over 80 per cent of its investments in US-listed securities. The fund house charges about 0.85 per cent as management fee.
It has assets worth C$ 604 million under management and about 73 million outstanding unitholders. The ETF management’s objective is to offer capital appreciation, regular cash distributions, and lower volatility returns through this fund.
The fund has a 0.584 beta coefficient, indicating lower volatility of each unit.
It has returned about 10.2 per cent in the last three years, and about 16.4 per cent in the last one year.
The ETF has a monthly dividend of C$ 0.058, payable on July 9, 2021, with a current yield of 8.475 per cent. Its trading volumes record an average of 139,073 units for the last 30 days.
Its unit price stood at C$ 8.255 as of June 24, 2021, trading close to its 52-week high of C$8.36 per unit.
iShares S&P/TSX Capped Financials Index ETF (TSX:XFN)
The ETF invests in 100 per cent equity holdings and seeks to offer long-term growth in capital by largely mirroring the S&P/TSX Capped Financials Index.
With 100 per cent equity investment in the financial sector, and a miniscule share of the pie in real estate sector, this ETF has grown nearly 53 per cent in the last one year. It clocked 11 per cent gains in the last three years.
All its investments are in the Canadian market, with about C$ 1.61 billion assets under management.
The ETF, managed by RBC iShares, has a 0.55 per cent management fee, with about 34.5 million outstanding units.
The financial sector mapping fund has a monthly payout cycle for its dividend of C$ 0.111 apiece, payable on June 30, 2021.
Its unit were priced at C$ 46.57 on June 24, 2021. The security offers a 13.59 per cent return on equity (ROE).
Horizons S&P/TSX 60 Index ETF (TSX:HXT.U) (no dividend info on TSX)
This ETF replicates the TSX:HXT ETF, mirroring the S&P/TSX 60 Index. With slightly lower assets under management at C$ 2.16 billion, this index is available in US dollars.
The fund family, Horizons TRI ETFs, charges 0.03 per cent management fee.
The units of this ETF trade at US$ 38.27, slightly lower than its 52-week high of C$ 38.82 (June 10, 2021).
It has returned over 25.9 per cent in the past six months, 51 per cent in the last one year, and 12.7 per cent in the last five years.
This ETF has a P/E ratio of 18.90, and a price-to-book ratio of 2.20. Its ROE stands at 14.3 per cent, with a beta coefficient of 1.333.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.