Top-Performing Canadian ETFs for the Month

Exchange-traded funds, or ETFs, are often low-cost instruments for investors to track popular indexes or leverage experienced manager choices in an attempt to beat the market. The best ones serve as building blocks for a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.

In July 2024, the top-performing ETFs included financial services equity fund RBC US Banks Yield Index ETF RUBY and precious metals equity fund iShares S&P/TSX Global Gold Index ETF XGD. Data in this article is sourced from Morningstar Direct.

Screening for the Best-Performing ETFs

To find the month’s best-performing ETFs, we screened equity, allocation, and fixed income funds that trade within Canada for those that have at least C$10 million in total assets. We narrowed the list to only ETFs with parent pillars for their Morningstar Medalist Ratings of average or above, meaning our analysts believe they’re backed by industry-standard asset management companies. We also excluded exchange traded notes, known as ETNs.

The 10 Best-Performing ETFs for July 2024:

1. RBC US Banks Yield Index ETF RUBY
2. iShares S&P/TSX Global Gold Index ETF XGD
3. BMO Equal Weight US Banks Index ETF ZBK
4. Hamilton US Mid-Cap Financials ETF HUM
5. BMO Equal Weight Global Gold Index ETF ZGD
6. iShares S&P US Small-Cap Index ETF XSMC
7. BMO S&P US Small Cap Index ETF ZSML
8. BMO Junior Gold Index ETF ZJG
9. Vanguard FTSE Canadian Capped REIT Index ETF VRE
10. iShares S&P US Small-Cap Index ETF (CAD-Hedged) XSMH

Metrics for the Best-Performing ETFs

RBC US Banks Yield Index ETF

• Morningstar Rating: 2 stars
• Expense Ratio: 0.32%
• Morningstar Category: Financial Services Equity

The C$13 million RBC US Banks Yield Index ETF was the best-performing ETF in July, with a 14.43% return. The passively managed RBC ETF beat the 1.74% decline on the average fund in Morningstar’s financial services equity category for the month. Over the last 12 months, the RBC US Banks Yield Index ETF has returned 34.11%, outperforming the 17.93% gain on the average fund in its category, leaving the ETF in the 6th percentile.

The RBC US Banks Yield Index ETF has a Morningstar Medalist Rating of Bronze. It was launched in May 2018.

iShares S&P/TSX Global Gold Index ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.61%
• Morningstar Category: Precious Metals Equity

The second-best performing ETF in July was the C$1.4 billion iShares S&P/TSX Global Gold Index ETF. The passively managed iShares ETF returned 13.80%, outperforming the average precious metals equity fund, which lost 3.87%. Looking back over the last 12 months, the iShares S&P/TSX Global Gold Index ETF has returned 27.40%, outperforming the 18.02% return on the average fund in its category, leaving the ETF in the 27th percentile.

The Silver-rated iShares S&P/TSX Global Gold Index ETF was launched in March 2001.

BMO Equal Weight US Banks Index ETF

• Morningstar Rating: 2 stars
• Expense Ratio: 0.38%
• Morningstar Category: Financial Services Equity

The C$789 million BMO Equal Weight US Banks Index ETF ranked third for the month, returning 13.31%. The BMO ETF, which is passively managed, topped the 1.74% average loss on funds in the financial services equity category for July. Over the last 12 months, the BMO ETF has returned 41.56%, ahead of the 17.93% gain on the average fund in its category, leaving the ETF in the 1st percentile.

The BMO Equal Weight US Banks Index ETF has a Negative Morningstar Medalist Rating, meaning that our analysts expect it to be one of the worst performers within its category and think it is unlikely to deliver positive returns after fees.

Hamilton US Mid-Cap Financials ETF

• Morningstar Rating: 4 stars
• Expense Ratio: 0.91%
• Morningstar Category: Financial Services Equity

With a 12.89% return, the C$25 million Hamilton US Mid-Cap Financials ETF ranked fourth in July. The actively managed Hamilton Capital ETF outperformed the 1.74% loss on the average financial services equity fund. Over the last 12 months, the fund has gained 33.14%, ahead of the 17.93% return on funds in its category, placing it in the 10th percentile for the period.

The Hamilton US Mid-Cap Financials ETF has a Neutral Morningstar Medalist Rating. It was launched in June 2020.

BMO Equal Weight Global Gold Index ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.60%
• Morningstar Category: Precious Metals Equity

The fifth-best performing ETF was the C$97 million BMO Equal Weight Global Gold Index ETF, which gained 12.09% in July. This passively managed BMO ETF beat the 3.87% average loss on funds in the precious metals equity category. Over the past year, the BMO Equal Weight Global Gold Index ETF rose 36.67%, outperforming the 18.02% return on the average fund in its category and placing it in the 1st percentile.

The BMO Equal Weight Global Gold Index ETF, launched in November 2012, has a Morningstar Medalist Rating of Bronze.

iShares S&P US Small-Cap Index ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.22%
• Morningstar Category: US Small/Mid Cap Equity

The C$58 million iShares S&P US Small-Cap Index ETF was the sixth-best performing Canadian ETF in July, with an 11.99% return. The return on the passively managed iShares ETF topped the 0.59% decline on the average fund in Morningstar’s US small-cap/mid cap equity category. Looking back over the last 12 months, the iShares S&P US Small-Cap Index ETF has returned 19.36%, outperforming the 11.61% return on the average fund in its category, leaving the ETF in the 25th percentile.

The Bronze-rated iShares S&P US Small-Cap Index ETF was launched in September 2019.

BMO S&P US Small Cap Index ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.22%
• Morningstar Category: US Small/Mid Cap Equity

The seventh-best performing ETF in July was the C$174 million BMO S&P US Small Cap Index ETF. The passively managed BMO ETF returned 11.73%, outperforming the average US small-cap/mid cap equity fund, which lost 0.59%. Looking back over the last 12 months, the BMO S&P US Small Cap Index ETF has returned 18.93%, outperforming the 11.61% return on the average fund in its category, leaving the ETF in the 30th percentile.

The BMO S&P US Small Cap Index ETF has a Morningstar Medalist Rating of Bronze. It was launched in January 2020.

BMO Junior Gold Index ETF• Morningstar Rating: 2 stars
• Expense Ratio: 0.61%
• Morningstar Category: Precious Metals Equity

The C$70 million BMO Junior Gold Index ETF ranked eighth for the month, returning 11.23%. The BMO ETF, which is passively managed, topped the 3.87% average loss on funds in the precious metals equity category. Over the last 12 months, the BMO ETF has returned 30.84%, ahead of the 18.02% return on the average fund in its category, leaving it in the 10th percentile for performance.

The Neutral-rated BMO Junior Gold Index ETF was launched in January 2010.

Vanguard FTSE Canadian Capped REIT Index ETF

• Morningstar Rating: 1 star
• Expense Ratio: 0.40%
• Morningstar Category: Real Estate Equity

With an 11.00% gain, the C$282 million Vanguard FTSE Canadian Capped REIT Index ETF ranked ninth in July. The passively managed Vanguard ETF outperformed the 0.62% return on the average real estate equity fund. Over the last 12 months, the fund has returned 8.94%, ahead of the 3.77% return on funds in its category, placing it in the 61st percentile.

The Vanguard FTSE Canadian Capped REIT Index ETF, launched in November 2012, has a Morningstar Medalist Rating of Silver.

iShares S&P US Small-Cap Index ETF (CAD-Hedged)

• Morningstar Rating: 1 star
• Expense Ratio: 0.22%
• Morningstar Category: US Small/Mid Cap Equity

The tenth-best performing ETF was the C$28 million iShares S&P US Small-Cap Index ETF (CAD-Hedged), which gained 10.99% in July. The passively managed iShares ETF beat the 0.59% average loss on funds in the US small-cap/mid cap equity category. Over the past year, the iShares S&P US Small-Cap Index ETF (CAD-Hedged) rose 12.14%, roughly in line with the 11.61% return on the average fund in its category and placing it in the 82nd percentile.

The iShares S&P US Small-Cap Index ETF (CAD-Hedged) has a Morningstar Medalist Rating of Bronze. It was launched in September 2019.

What Are ETFs?

Exchange-traded funds are investments that trade throughout the day on stock exchanges, much like individual stocks. They differ from traditional mutual funds – known as open-end funds – which can only be bought or sold at a single price each day. Historically, ETFs have tracked indexes, but in recent years, more ETFs have been actively managed. ETFs cover a range of asset classes, including stocks, bonds, commodities, and most recently cryptocurrency.

The Best ETFs: More Ideas to Consider

Investors who would like to find more of the top-performing or cheapest ETFs can do the following:

• Use the ETF Screener tool to find the best ETFs according to your specific criteria. You can search for funds based on their fees, Morningstar Medalist Ratings, manager tenures, and more.

• Find ideas specific to your needs, or learn more about ETFs, on our ETF Insights page.

• Compare funds and ETFs side by side and easily follow their valuations, ratings, and fees.

This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Andrew Willis.

This article was generated with the help of automation and reviewed by Morningstar editors.

Source link