In this post, we will be reviewing the offering for Bitcoin and Ethereum ETFs in Canada. We will first have a look at the advantages of holding an ETF rather than the cryptocurrency directly. Then we will compare the prospects for both Bitcoin and Ethereum. Finally, we go through the ETFs available in the market thus far (comparison of MER and Asset under management).
What’s a Bitcoin
You can review our previous post or check the more detailed source below.
This is one of the greatest features of holding a cryptocurrency ETF. You can take advantage of the growth potential of these speculative investments within a registered account.
You cannot accomplish this if you invest in Bitcoin or Ethereum directly.
Simple to trade and safety
Buying bitcoin or Ether can be challenging. Investors need to familiarize themselves with a lot of new concepts before even considering acquiring cryptocurrencies. Add to this, the choice of platform is left to the investor when he acts on his own and the storage/safety too.
Cryptos in ETFs are Physically settled and safely held in cold storage. Cold storage is a way of holding cryptocurrency tokens offline (so inaccessible for hackers).
When you buy a Crypto ETF, there is no need of a wallet account.
Should you buy a Bitcoin ETF or an Ethereum ETF?
Bitcoin and Ethereum rely on the same technology. This being said, they are quite different when it comes to the purpose. In essence, Bitcoin’s objective is to become a true currency. It has achieved a lot of head wings in the past years. According to Coinbase, 20% of all Bitcoin transactions were actual payments for exchange of services. Slowly, Bitcoin is becoming widely accepted and viewed as an alternative to national currencies. Besides, the entry of institutional investors into this market will for sure bring some stability in comparison to the rocky beginning of Bitcoin. As a bitcoin ETF holder, you are part of the movement that will stabilize Bitcoin.
What makes Bitcoin appealing is the cap of 21 million units that can be created. This limited supply will help Bitcoin keep a threshold value.
On the other hand, Ethereum was intended as a platform to facilitate smart contracts via its own currency. As more and more smart contracts and decentralized applications are built Ethereum’s popularity and profitability will increase. There is no cap in the number of Ethereum that can be created. Ethereum has gained credibility when Microsoft and ConsenSys partnered to offer Ethereum Blockchain as a service on Microsoft Azure.
Advantages and Disadvantages
+ Advantages
– Disadvantages
Bitcoin
Bitcoin technology is well established
Bitcoin is more and more popular and with the entry of institutional investors, the volatility would be lower
Limit of 21 Millions makes it valuable
Government regulations can hinder its growth
Ethereum
Technology is promising but not yet well established High risk but also high reward if technology becomes streamlined
Government regulations can hinder its growth
No cap on the number of Ethereum that can be created makes it less appealing for some investors
Newer technology than Bitcoin, so more risk and more potential growth
The CI Galaxy Bitcoin stands out for its low MER in comparison with BTCC purpose bitcoin.
BTCC Purpose bitcoin
Purpose Bitcoin ETF (the “Fund”) invests in and holds substantially all of its assets in long-term holdings of the digital currency bitcoin. Its considered a high risk investment. As such, it should not constitute a large portion of your portfolio but rather a minimal portion.
BTCC-B: Trades in Canadian dollars
BTCC-U: Trades in US dollars
BTCC: Trades in Canadian dollars and is hedged against currency fluctuations.
CI Galaxy Bitcoin
The ETF’s investment objective is to provide holders of units exposure to bitcoin through an institutional-quality fund platform.
Purpose Ether ETF invests in and holds substantially all of its assets in long-term holdings of the digital currency ether (“Ether”).
CI Galaxy Ethereum ETF
The ETF’s investment objective is to provide holders of units exposure to Ether through an institutional-quality fund platform.
ARKK is the largest actively managed Exchange Traded Fund in the US. Its performance since its inception has been short of exceptional. It’s widely popular among investors. If you just heard about it then let’s dive in together to determine if it’s still a good time to buy! Or time to stay away from the bubble that can be caused by some its overvalued holdings.
ARK philosophy is built around investing in disruptive technologies. It means it’s looking to invest now in the technologies that will dominate the future. So far, the fund manager Catherine D Wood has been successful at her choices and the ETF has become widely known among investors as one of the best performing ETFs out there.
As per the prospectus, ARKK is an actively managed ETF that seeks log-term growth. At least 65% of its assets have to be invested in it’s theme which is DNA technologies (‘‘Genomic Revolution”), industrial innovation in energy, automation and manufacturing (‘‘Industrial Innovation’’), the increased use of shared technology, infrastructure and services (‘‘Next Generation Internet’), and technologies that make financial services more efficient (‘‘Fintech Innovation’’).
Note: Past performance does not guarantee future results.
ARKK ETF Top 10 Holdings
company
weight (%)
TESLA INC
7.17%
ROKU INC
6.23%
TELADOC HEALTH INC
6.14%
ZOOM VIDEO COMMUNICATIONS-A
6.10%
COINBASE GLOBAL INC -CLASS A
4.76%
UNITY SOFTWARE INC
4.59%
SPOTIFY TECHNOLOGY SA
4.20%
TWILIO INC – A
4.16%
EXACT SCIENCES CORP
3.92%
INTELLIA THERAPEUTICS INC
3.79%
as of December 21st
ARKK ETF Methodology
To better assess if ARKK is a good ETF to buy, we have to look into:
MER: The management expense ratio for this ETF is really low (0.75%) considering it’s an actively managed fund (not just an ETF tracking an index).
The holdings: The list is shown in the table above and includes some household names in addition to other less known to the public technology companies. In my analysis I will focus on its top holding which are Tesla inc and Roku Inc.
Tesla
The performance of Tesla Inc Shares has definitely helped ARKK reach amazing returns in 2020. The enthusiasm for Tesla reminds many analysts of a pre-bubble phase. The stock is trading at a valuation that is very difficult to justify with its financial ratios:
Price / Earning ratio for Tesla: 175x
Price / earning ratio (average whithin its industry): 15x
The numbers speak for themselves, Tesla has a Price / Earning ratio that is way over the industry average. To be able to value a company, you need to determine its future earnings and its growth rate in the future. At the current valuation, Tesla needs to post insane profits in the coming years which is realistically unlikely. Just a reference Tesla started the year 2020 with a market capitalization of $81 B and ended the year at $420 B. On December 2020, it made its entry to the S&P500. This means Tesla shares will have to be purchased by all index fund managers who track the S&P500. This will for sure help Tesla shares be more stable as a good portion of its shares will be held by institutional investors. Many analysts believe though that the entry to the S&P will help a bit but only in the short term. The performance of the company will reside on its ability to deliver on its upcoming new car Model Y. Also, Tesla needs to up significantly its sales for her autonomous driving software to convince the market. Software sales were key in making Tesla profitable in the past years because of their high margin.
In short, Tesla needs to maintain investors hope really high to keep its current valuation. Any unexpected drop in sales or issues with its new model will shake investors’ confidence. We need also to keep in mind the competition which is working hard to catch up to Tesla in the electric vehicle segment.
Roku inc
Compared to its lows of March 2020, Roku’s shares have had a terrific ride (Up 420%). The fact that the company posted losses in 2020 did not discourage investors. The growing number of Roku’s daily active users seems to be the main driver. Many analysts expect the company to increase its revenues at the expense of traditional media content.
Roku is expected to meet expectation because:
Growth in sales of Roku smart tv’s;
Roku’s acquisition of new content such as Quibi’s;
Growth in ad revenues.
Final thought
As you can see above, Tesla Inc which represents 10% of ARKKs holdings have a questional valuation. This could slow some of the futur returns. However, one should note that the main aspect of an actively managed fund is the quality of its manager. ARKK has consitently out performed the index since its creation. So, the recent performance is not a coincidence. We recommend a buy and hold strategy because of the long term return potentiel.
Please see other posts you might be interested in!
In this post we will review the Top 7 Best US Growth ETF in terms of performance (past 52 weeks)! We have selected only ETFs that had the highest returns. Also, we limited ourselves to ETFs that have asset under management (AUM) above 1 Billion 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. I personally use this list to understand market trends and anticipate future ones.
Highlights
Index ETFs tracking the Energy sector dominate our top 7 Best US Growth ETFs. In the sections below, we will discuss the reasons that could explain their amazing performance so far.
Energy
Within the past year, the S&P 500 Energy Sector index has been outpacing the broad S&P 500 index by a 20% margin, according to etftrends.com. This benefited Energy ETFs who are invested in significant Oil & Gaz producers. The fears surrounding supplies continue to be the primary catalyst. The US government tried to convince OPEC+ to increase production, but so far, these efforts have failed. Consequently, the United States will be using the strategic petroleum reserve to try to appease markets. Several other courtiers are expected to follow suit.
What lies ahead for 2022 is potentially more stable growth. Investors should pick producers who can benefit from the recent supply issues and who are also prepared to switch to wind and/or solar energy to reap future growth opportunities.
Moody’s said in a report on Friday (November 19) “The ongoing recovery in global oil demand, gradual supply growth, and a manageable cost environment will provide a supportive macro backdrop for producers to maintain earnings above 2019 levels,”. “Many producers that did not invest sufficiently in 2020-21 will seek to boost capital budgets to stabilize production and stave off potential declines in volumes.”
Carbon (cap-and-trade)
Carbon credits are part of cap-and-trade schemes meant to reduce CO2 emissions. Governments’ green initiatives has led Carbon prices to hit new records over the past year.
Uranium
The potential growth in global demand for uranium is pushing uranium stocks and ETFs higher. China has unveiled plans to build 50 new nuclear power plants. Also, the new American administration is keen to reduce its dependence on coal and oil. There is a push for clean electricity through energy sources like nuclear power. This is because nuclear power provides a low-carbon source of energy that is not intermittent, unlike wind and solar power.
The KraneShares Global Carbon Strategy ETF (KRBN) invests in carbon credits (using future contracts). These credits are used in cap-and-trade schemes meant to reduce CO2 emissions.
The performance of KRBN is directly linked to the price of carbon.
2) XOP – S&P Oil & Gas Expl & Prod SPDR
The SPDR® S&P® Oil & Gas Exploration & Production ETF seeks to provide exposure to the oil and gas exploration and production segment. This ETF invests in large, mid and small cap stocks.
XOP invests directly in businesses involved in: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing
Top Holdings
Name
Weight
PBF Energy Inc. Class A
2.51%
Valero Energy Corporation
2.49%
APA Corp.
2.41%
Devon Energy Corporation
2.40%
EQT Corporation
2.39%
Phillips 66
2.39%
Marathon Oil Corporation
2.38%
Marathon Petroleum Corporation
2.36%
HollyFrontier Corporation
2.34%
Antero Resources Corporation
2.33%
Fund Top Holdings as of Jan 03 2022
3) USO – US Oil Fund
The United States Oil Fund® LP (USO) is an ETF that tracks the price of West Texas Intermediate Light Sweet Crude Oil.
4) REMX – Rare Earth/Strategic Metals Vaneck ETF
VanEck Vectors® Rare Earth/Strategic Metals ETF (REMX®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS® Global Rare Earth/Strategic Metals Index (MVREMXTR), which is intended to track the overall performance of companies involved in producing, refining, and recycling of rare earth and strategic metals and minerals.
Daily Holdings (%) as of 01/03/22, Total Holdings: 20
5) FENY – Fidelity Energy MSCI ETF
FENY offers exposure to the energy sector in the U.S. equity market (by tracking the MSCI USA IMI Energy Index)
Portfolio Composition
Exxon Mobil Corp
19.86%
Chevron Corp
17.03%
ConocoPhillips
7.13%
EOG Resources Inc
4.07%
Pioneer Natural Resources Co
3.31%
Schlumberger Ltd
3.22%
Marathon Petroleum Corp
3.18%
Williams Companies Inc
2.61%
Kinder Morgan Inc Class P
2.53%
Phillips 66
2.43%
Holdings AS OF 11/30/2021
6) VDE – Energy ETF Vanguard
VDE is an index ETF (passively managed). The funds seeks to provide exposure to the US energy equity market.
Month-end 10 largest holdings (66.30% of total net assets) as of 11/30/2021
1 Exxon Mobil Corp. 2 Chevron Corp. 3 ConocoPhillips 4 EOG Resources Inc. 5 Pioneer Natural Resources Co. 6 Schlumberger NV 7 Marathon Petroleum Corp. 8 Williams Cos. Inc. 9 Kinder Morgan Inc. 10 Phillips 66
7) URA -Global X Uranium
URA is a targeted play on uranium mining and the production of nuclear components.
Net Assets (%)
Name
23.23
CAMECO CORP
10.42
NAC KAZATOMPROM JSC-GDR
7.16
NEXGEN ENERGY LTD
6.55
PALADIN ENERGY LTD
4.69
DENISON MINES CORP
4.45
ENERGY FUELS INC
3.33
URANIUM ENERGY CORP
2.93
YELLOW CAKE PLC
2.19
CENTRUS ENERGY-A
2.01
CGN POWER CO LTD-H
Top Holdings As of 01/04/22
Archive
Transformational Data Sharing Amplify ETF (BLOK)
With all the hype surrounding cryptocurrencies, it’s no surprise that a blockchain technology ETF tops the list of the best performing ETFs in the US. This ETF is BLOK and it’s offered by AmplifyETFs. The fund invests primarily in companies involved in the development and utilization of blockchain technologies. One of the most known application of these technologies is Bitcoin and other similar cryptocurrencies. This being said, it’s not the only application. It applied in various other ways:
– Financial services: blockchain will revolutionize the way banks settle financial transactions or sell you financial products such insurances..etc.;
– Smart property: think of it as making everything that belong to you connected to each other such as you car, your home, your fridge…etc.;
– Smart contract: any service that contractual: music, health, financial products will be soon impacted by blockchain technologies!
– Blockchain identity: Governments are quite interested in investing in blockchain technology. They will be soon able to produce digital passports or provide you with Birth, wedding or death certificates all online with guarantee of very low risk of error in them. !
BLOK is very popular ETF and has 1.3 Billion dollars in asset under management.
Amplify Seymour Cannabis ETF (CNBS)
CNBS is an actively managed ETF that invests in companies that drive 50% or more of their revenue from the Cannabis and Hemp ecosystem. These companies can be small, medium or large cap. The fund’s selection of stock includes also companies that supports the industry such agricultural technology, Real Estate and Commercial Services, or Ancillary (Consumption Devices/Mechanisms, Investing & Finance, Technology & Media and Other Ancillary).
Advisorshares Pure Cannabis ETF (YOLO)
YOLO is another play in the Cannabis field. This fund is actively managed and screens the market (domestically and internationally) for companies that drive at least 50% of their net revenue from marijuana and hemp industries. 25% of the assets of the fund are in the pharmaceuticals, biotechnology and life sciences.
COPX – G-X Copper Miners ETF
The Global X Copper Miners ETF (COPX) provides investors access to a broad range of international companies active in exploration, mining and/or refining of copper. Number of holdings can range from 20 to 40. Adjustments are carried out semi-annually.
Online Retail Amplify ETF (IBUY)
This ETF tracks an index of global stocks issued by firms with revenues dominated by online retail sales. These firms must have at least 70% of their revenues from online sales. The geographic allocation of this ETF is 75% US stocks and 25% International.
XRT – S&P Retail SPDR
The SPDR® S&P® Retail ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P® Retail Select Industry® Index. The retail segment of the S&P TMI comprises the following sub-industries: Apparel Retail, Automotive Retail, Computer & Electronic Retail, Department Stores, Drug Retail, Food Retailers, General Merchandise Stores, Hypermarkets & Super Centers, Internet & Direct Marketing Retail, and Specialty Stores.
In 7th position, we have a small cap ETF. The Invesco S&P SmallCap Consumer Discretionary ETF (Fund) is based on the S&P SmallCap 600® Capped Consumer Discretionary Index (Index). The Fund will normally invest at least 90% of its total assets in the securities that comprise the Index.
Companies part of the index are engaged in consumer goods and services that are cyclical in nature, including retail, automotive, leisure and recreation, media and real estate. PSCD is balanced in a quarterly basis.
SPDR S&P Kenso Smart Mobility – HAIL
HAIL invests in companies whose products and services are driving innovation behind smart transportation, which includes the areas of autonomous and connected vehicle technology, drones and drone technologies used for commercial and civilian applications, and advanced transportation tracking and transport optimization systems.
The North Shore Global Uranium Mining ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the North Shore Global Uranium Mining Index (the “Index”). The Index is designed to track the performance of companies that are involved in the mining, exploration, development, and production of uranium, as well as companies that hold physical uranium or other non-mining assets.
FCG -Natural Gas FT
The investment objective of the Fund is to replicate the performance of an equity index called the ISE-Revere Natural Gas™ Index.
The index itself is comprised of exchange-listed companies that derive a substantial portion of their revenues from the exploration and production of natural gas. Several criteria’s are applied in the selection process:
proven reserves minimum
Liquidity
Market capitalization
Weighting concentration
PXE -Dynamic Energy Exploration & Production Invesco
The Invesco Dynamic Energy Exploration & Production ETF is based on the Dynamic Energy Exploration & Production Intellidex℠ Index (Index).
The Index is composed of securities of 30 U.S. companies involved in the exploration and production of natural resources used to produce energy. The index will include stocks that meet several criteria’s:
price momentum,
earnings momentum,
quality,
management action,
value
UNG -US Natural Gas Fund
The United States Natural Gas Fund® LP (UNG) is an exchange-traded security that is designed to track in percentage terms the movements of natural gas prices. The fund does not hold Natural Gaz stocks but rather invests in futures contract.
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.
The Canadian stock market remains marked by great volatility. From the precipitous market decline at the onset of the pandemic to recent record highs in 2021, the market has certainly tested the courage of investors. To help you, we have compiled 3 lists of the best performing Canadian stocks to buy:
– The best large cap stocks in terms of performance since the start of the year. Large cap means that the company must have a market value greater than $ 10 billion;
– The best mid cap stocks in terms of performances since the start of the year. Mid cap means the company must have a market value greater than $2 Billion;
– The best small cap stocks in terms of performances since the start of the year. Small cap means the company must have a market value greater than $300 Millions;
Best Canadian Stocks in 2021 (Small cap) by performance
Symbol
Name
YTD %Chg
3Y %Chg
ATH
Athabasca Oil Corp
600.00%
6.25%
NVA
Nuvista Energy
558.51%
70.99%
FIL
Filo Mining Corp
510.36%
435.45%
CR
Crew Energy Inc
446.43%
183.33%
PIPE
Pipestone Energy
425.37%
80.51%
OBE
Obsidian Energy
414.94%
-3.03%
CJ
Cardinal Energy
392.68%
55.38%
AAV
Advantage Oil & Gas
314.62%
219.37%
BIR
Birchcliff Energy
266.67%
96.67%
NEXT
Nextsource Mat
257.78%
222.00%
November 30th Barchart
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.
TELUS Corporation, together with its subsidiaries, provides a range of telecommunications and information technology products and services in Canada. It operates through Wireless and Wireline segments.
Telus trades in the Toronto Stock Exchange (TSE). Telus is a dividend aristocrat stock with 17 years of consecutive dividend increases!. The list of Canadian ”Dividend Aristocrats” stocks is managed by the firm Standard and Poors. The index is titled the S&P Canadian Dividend Aristocrats. It requires a minimum of 5 years of successive dividend increases. For the full list of Canadian Dividend Aristocrats stocks, please follow the link here.
TSE T – Dividend profile
Telus stock offers an attractive yield of 4.50%. The dividend is not safe as the pay out ratio is over 100%. The telecom company increased its dividends for 17 consecutive years which is a sign of a solid financial situation.
The dividend growth in the past five years was 7%. This is really good news for any investor. The continuous increase in dividends helps investor cope with the impact of inflation.
The Beta is a measure of volatility. Telus’s Beta is at 0.5 meaning the stock is less volatile than the overall market.
Telus witnessed a modest growth in revenues in the past 5 years mainly due to the impact of the pandemic on travel activites (which generate very profitable roaming charges).
TSE-T – Analysis and financial data
Telus offers stable dividend. It’s somewhat similar to a bond with better return. The company enjoys being part of an industry that has high barriers to entry. The competition is limited to the usual players such as BCE, Rogers…etc. The industry itself can be viewed as an oligopoly. Many analysts consider the dividend to be safe but warn of limited growth.
The stock market remains marked by great volatility. From the precipitous market decline at the onset of the pandemic to recent record highs in 2021, the market has certainly tested the courage of investors. To help you, we have compiled 3 lists:
– the best Mega caps in terms of performance since the start of the year. Mega caps means that the company must have a market value greater than $ 200 billion;
– the best large cap stocks in terms of performance since the start of the year. Large cap means that the company must have a market value greater than $ 10 billion;
– the best mid cap stocks in terms of performances since the start of the year. Mid cap means the company must have a market value greater than $2 Billion;
– the best small cap stocks in terms of performances since the start of the year. Small cap means the company must have a market value greater than $300 Millions dollars;
Best US Stocks in 2021 (Mega cap) by performance
Name
YTD %Chg
3Y * %Chg
ASML – Asml Hld NY Reg ADR
63.1
290.1
LLY – Eli Lilly & Co
55.4
156.6
NVDA – Nvidia
55.3
218.2
GOOG – Alphabet Cl C
55.2
119.8
GOOGL – Alphabet Cl A
54.2
115.7
NVO – Novo Nordisk A/S ADR
40.6
109.5
ORCL – Oracle Corp
39.2
86.3
XOM – Exxon Mobil
37.8
-28.4
DHR – Danaher
37.5
204.6
FB – Facebook Inc
31.4
99.1
As of August 4th, Barchart.com , *Cumulative return
Similar posts:
Best US Stocks in 2021 (Large cap) by performance
Name
YTD %Chg
3Y %Chg
AMC – Amc Enter
1,307.5
71.0
GME – Gamestop Corp
679.1
858.2
BNTX – Biontech Se ADR
408.3
N/A
MRNA – Moderna Inc
301.1
N/A
ASAN – Asana Inc Cl A
146.7
N/A
FUTU – Futu Holdings Ltd ADR
133.9
N/A
LB – L Brands Inc
114.9
155.8
TFII – Tfi Inter Inc
113.4
206.7
FTNT – Fortinet Inc
104.6
303.8
CLR – Continental Res
101.4
-49.3
As of August 4th, Barchart.com , *Cumulative return
As of August 4th, Barchart.com , *Cumulative return
Best US Stocks in 2021 (Small cap) by performance
Name
YTD %Chg
3Y %Chg
VTNR – Vertex Energy
1,080.1
577.4
MOXC – Moxian Inc
601.4
20.2
SGOC – Sgoco Gr
451.7
676.7
EXPR – Express Inc
424.1
-54.7
PDSB – Pds Biotechnology Corp
420.5
-38.7
BTU – Peabody Energy Corp
356.8
-74.6
UXIN – Uxin Ltd ADR
303.4
-46.4
IDT – IDT Corp
302.0
857.4
XYF – X Financial ADR
289.5
N/A
OCGN – Ocugen Inc
271.0
-95.3
As of August 4th, Barchart.com , *Cumulative return
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.
June 16th 2021: In this post we will review the Top 10 Best Growth ETF in the United States 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.
Highlights
Dry Bulk shipping
Because commodities are in a strong upcycle following the gradual reopening of global economies. Dry bulk shipping is historically a major beneficiary of commodity cycles.
Dry bulkers carriers account for 43% of the world fleet. They carry out 55% of global work. They serve essential needs such as food and energy supplies.
Energy (Oil and Natural gas)
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.
Many argue that we are headed to a commodities super-cycle. A phenomenon caused by inadequate supply faced with increase demand for commodities. This will impact all major commodities.
Small Caps
Smaller stocks have historically led after recessions, which could augur well for small-caps if the economy continues to strengthen this year, and the new stimulus bill in the US is expected to boost spending. However, investors should keep in mind small caps are inherently risky and more volatile.
Table 1: Info on: Asset under management in Millions and Management fee.
BDRY provides long exposure to the dry bulk shipping market through a portfolio of near-dated freight futures contracts on dry bulk indices. The Fund is designed to give investors pure-play exposure to the dry bulk market through a portfolio of near-dated freight futures contracts on dry bulk indices without the need for a futures account.
BDRY ETF Holdings
Name
% Total Assets
BALTIC CAPESIZE TIME CHARTER /JUNE 2021
15.78%
BALTIC EXCHANGE PANAMAX T/C /JUNE 2021
14.86%
BALTIC CAPESIZE TIME CHARTER /JUL 2021
13.99%
BALTIC CAPESIZE TIME CHARTER /AUG 2021
13.97%
BALTIC CAPESIZE TIME CHARTER /SEPT 2021
13.88%
BALTIC EXCHANGE PANAMAX T/C /JUL 2021
10.83%
BALTIC EXCHANGE PANAMAX T/C /AUG 2021
10.45%
BALTIC EXCHANGE PANAMAX T/C /SEPT 2021
10.15%
SUPRAMAX 58 TC FFA 58KT
3.41%
Issuer’s website as of June 15th
2- PSCE – S&P Smallcap Energy Invesco
The Invesco S&P SmallCap Energy ETF (Fund) is based on the S&P SmallCap 600® Capped Energy Index (Index). The Fund will normally invest at least 90% of its total assets in the securities of small-capitalization US energy companies that comprise the Underlying Index.
PSCE ETF Holdings
Company
% of Fund
PDC Energy Inc
9.84
Range Resources Corp
8.10
Matador Resources Co
7.58
Helmerich & Payne Inc
7.50
Southwestern Energy Co
7.21
Renewable Energy Group Inc
6.08
SM Energy Co
4.87
Callon Petroleum Co
4.67
Core Laboratories NV
4.08
Patterson-UTI Energy Inc
3.99
Issuer’s website as of June 15th
3- FCG – Natural Gas FT
FCG is invested in exchange-listed companies that derive a substantial portion of their revenues from the exploration and production of natural gas.
FCG ETF Holdings
Security Name
Weighting
DCP Midstream, LP
4.89%
Devon Energy Corporation
4.70%
Western Midstream Partners LP
4.68%
Hess Corporation
4.60%
EOG Resources, Inc.
4.54%
Marathon Oil Corporation
4.27%
Diamondback Energy, Inc.
4.20%
ConocoPhillips
4.02%
Antero Resources Corporation
3.79%
Issuer’s website as of June 15th
4- PXI – DWA Energy Momentum Invesco
The Invesco DWA Energy Momentum ETF (Fund) invests in companies showing relative strength (momentum), and is composed of at least 30 securities from the NASDAQ US Benchmark Index.
PXI ETF Holdings
Company
% of Fund
Cheniere Energy Inc
5.45
Callon Petroleum Co
4.38
Ovintiv Inc
4.37
Matador Resources Co
4.32
Texas Pacific Land Corp
4.19
SM Energy Co
4.14
Antero Resources Corp
3.62
Nabors Industries Ltd
3.10
Southwestern Energy Co
3.10
Clean Energy Fuels Corp
3.00
Issuer’s website as of June 15th
5- AMZA – Infracap MLP ETF
The Fund seeks to provide exposure to midstream master limited partnerships (MLPs) with an emphasis on high current income.
AMZA ETF Holdings
Security
Weight %
MPLX LP
17.25
ENTERPRISE PRODUCTS PARTNERS
15.35
WESTERN MIDSTREAM PARTNERS L
12.00
PLAINS ALL AMER PIPELINE LP
11.79
NUSTAR ENERGY LP
10.19
ENERGY TRANSFER LP
9.51
DCP MIDSTREAM LP
8.66
BP MIDSTREAM PARTNERS LP
6.99
PHILLIPS 66 PARTNERS LP
6.44
CRESTWOOD EQUITY PARTNERS LP
5.28
Issuer’s website as of June 15th
6- XOP – S&P Oil & Gas Expl & Prod SPDR
XOP Seeks to provide exposure the oil and gas exploration and production segment of the S&P TMI, which comprises the following sub-industries: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing
Seeks to track a modified equal weighted index which provides the potential for unconcentrated industry exposure across large, mid and small cap stocks
Allows investors to take strategic or tactical positions at a more targeted level than traditional sector based investing
XOP ETF Holding
Name
Weight
Range Resources Corporation
3.55%
Antero Resources Corporation
3.45%
Southwestern Energy Company
3.19%
Hess Corporation
3.19%
Callon Petroleum Company
3.14%
Devon Energy Corporation
3.11%
Murphy Oil Corporation
3.09%
EQT Corporation
2.97%
EOG Resources Inc.
2.91%
Marathon Oil Corporation
2.89%
7- IEO – US Oil & Gas Explor & Prod Ishares
The iShares U.S. Oil & Gas Exploration & Production ETF seeks to track the investment results of an index composed of U.S. equities in the oil and gas exploration and production sector.
IEO ETF Holdings
Name
Weight (%)
CONOCOPHILLIPS
17.03
EOG RESOURCES INC
10.27
PHILLIPS
8.27
MARATHON PETROLEUM CORP
7.40
HESS CORP
5.15
CHENIERE ENERGY INC
4.81
DEVON ENERGY CORP
4.39
PIONEER NATURAL RESOURCE
4.12
DIAMONDBACK ENERGY INC
4.12
VALERO ENERGY CORP
4.07
Issuer’s website as of June 15th
8- URNM – Northshore Global Uranium Mining ETF
The North Shore Global Uranium Mining ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the North Shore Global Uranium Mining Index (the “Index”). The Index is designed to track the performance of companies that are involved in the mining, exploration, development, and production of uranium, as well as companies that hold physical uranium or other non-mining assets.
URNM ETF Holdings
COMPANY NAME
% OF NET ASSET VALUES
NAK KAZATOMPROM AO
16.51%
CAMECO CORP
15.20%
URANIUM PARTICIPATION CORP
7.98%
YELLOW CAKE PLC
5.98%
PALADIN ENERGY LTD
5.33%
DENISON MINES CORP
5.16%
NEXGEN ENERGY LTD
5.02%
ENERGY FUELS INC
4.25%
URANIUM ENERGY CORP
3.94%
CGN MINING CO LTD
3.87%
Issuer’s website as of June 15th
9- OIH – Oil Services Vaneck ETF
OIH is intended to track the overall performance of U.S.-listed companies involved in oil services to the upstream oil sector, which include oil equipment, oil services, or oil drilling.
OIH ETF Holdings
Name
Weight %
SCHLUMBERGER NV
22.02
HALLIBURTON CO
13.72
BAKER HUGHES CO
6.29
TENARIS SA
5.15
CHAMPIONX CORP
5.14
TECHNIPFMC PLC
4.97
NOV INC
4.55
LIBERTY OILFIELD SERVICES INC
4.50
HELMERICH & PAYNE INC
4.04
CACTUS INC
3.87
Issuer’s website as of June 15th
10- VDE – Energy ETF Vanguard
VDE follows a passive strategy. It includes stocks of companies involved in the exploration and production of energy products such as oil, natural gas, and coal.
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.
Intro
May 17, 2021: An analysis of investment flows last week by US site etf.com shows renewed interest in value ETFs at the expense of growth ETFs. Thus, 2 popular American ETFs: iShares MSCI USA Value Factor ETF (VLUE) and the SPDR S&P 400 Mid Cap Value ETF (MDYV) recorded significant positive flows.
Both Value stocks or ETFs are considered by investors to be more suitable in an environment marked by inflation and rising interest rates. This explains the strategic reallocation operated by major players in the market. In this article, we will review the value ETFs offering in the Canadian market. For each fund, we will summarize the most relevant information (Performance, Costs and strategy). The same information will be provided for the two most popular funds in the United States.
Value ETFs adopt an investment strategy based on acquiring undervalued securities in the market. These securities are commonly referred as “Value stocks”. The principle is simple:
• Determine the true value of a security using the present value of future earnings and cashflows;
• Wait until this security is on sale! Indeed, the markets vary according to the good or bad news that emerges. These variations are in the great majority of the time excessive. Therefore, an investor who follows this strategy will wait for the right time to acquire these securities.
List of available Value ETFs in Canada and US
See below for a list of most popular value ETFs listed on the Canadian market. The main difference between these funds is their geographic coverage. It’s up to you to choose the one that best suits your needs. Keep in mind the tax impact when investing in funds with foreign content.
Source: Brachart.com / YDT: Since the beginning of the year
FXM CI First Asset Morningstar Cda Value and VVL Vanguard Glob Val Factor had the best performance whether since the start of the year or in the last 52 weeks.
VXM-B CI First Asset Morningstar Intl Value Unheg
VXM-B invests in developed markets outside the United States and Canada. It is an index fund that tracks the performance of the Morningstar® Developed Markets Index® Outside North America Target ValueTM Index.
Securities are considered “good value” based on characteristics such as low price-to-earnings and price-to-cash flow ratios.
Portfolio dated May 14:
Nom
%
BANCA POPOLARE DI SONDRIO
0,76
BANCO DE SABADELL SA
0,71
FERREXPO PLC
0,68
BCO COM PORTUGUES EUR 1.125
0,65
BW LPG LTD USD 0.01 144A
0,65
NIPPON YUSEN KABUSHIKI KAISH
0,64
MITSUI OSK LINES LTD
0,62
SANDFIRE RESOURCES NL
0,61
MEKONOMEN AB
0,60
FRESENIUS SE & CO KGAA
0,59
BILIA AB NPV
0,59
FXM – CI First Asset Morningstar Cda Value
The Fund is designed to provide diversified exposure to Canadian issuers that are considered “good value” based on characteristics such as low price-to-earnings and price-to-cash flow ratios.
Nom
%
ARC RESOURCES LTD
7,28
POWER CORP CANADA
3,74
WESTON (GEORGE) LTD
3,69
GREAT WEST LIFECO INC
3,62
KEYERA CORP
3,61
ALTAGAS LTD
3,61
EQUITABLE GROUP INC
3,56
KINROSS GOLD CORP
3,54
ATCO LTD
3,52
VVL – Vanguard Glob Val Factor
Vanguard Global Value Factor ETF seeks to provide long-term capital appreciation by seeking to capture the potential for excess return generated by investing in developed market equity securities around the world that are low relative to their parameters. fundamentals.
Geographical distribution
Country
Weight
États-Unis
64,3 %
Japon
7,9 %
Royaume-Uni
4,9 %
Corée
3,9 %
Canada
3,1 %
France
3,0 %
Allemagne
2,6 %
Italie
1,6 %
Hong Kong
1,2 %
Pays-Bas
1,0 %
Holdings as of May 14th
Name
% Weight
Verizon Communications Inc.
0,50 %
Royal Dutch Shell plc
0,50 %
AT&T Inc.
0,50 %
CVS Health Corp.
0,50 %
FedEx Corp.
0,50 %
Bristol-Myers Squibb Co.
0,50 %
Walgreens Boots Alliance Inc.
0,50 %
Ford Motor Co.
0,50 %
General Motors Co.
0,50 %
Volkswagen AG
0,50 %
ZVU – BMO MSCI USA Value Index
BMO MSCI U.S. Value Index ETF invests in U.S. equities exhibiting high value characteristics based on three variables: price to book ratio, future price to earnings ratio and value to cash flow from operations. business.
Portfolio dated May 14, 2021
Weight (%)
Name
6,87%
AT&T INC
6,74%
INTEL CORP
3,58%
MICRON TECHNOLOGY INC
3,45%
GENERAL MOTORS CO
3,08%
INTERNATIONAL BUSINESS MACHINES CORP
2,35%
CITIGROUP INC
2,12%
TARGET CORP
2,12%
CISCO SYSTEMS INC/DELAWARE
1,88%
APPLIED MATERIALS INC
1,82%
FORD MOTOR CO
XCV – Ishares Canadian Value Index
XCV seeks long-term capital growth by replicating the performance of the Dow Jones Canada Select Value Index, net of expenses. XCV provides exposure to large and mid-sized Canadian companies that are believed to be undervalued by the market relative to comparable companies
Name
Weight (%)
TORONTO DOMINION
10,27
ROYAL BANK OF CANADA
9,98
BANK OF NOVA SCOTIA
9,58
BANK OF MONTREAL
7,97
CANADIAN IMPERIAL BANK OF COMMERCE
6,06
BARRICK GOLD CORP
5,28
MANULIFE FINANCIAL CORP
5,18
CANADIAN NATURAL RESOURCES LTD
5,04
SUNCOR ENERGY INC
4,38
NUTRIEN LTD
4,26
VLUE – iShares MSCI USA Value Factor ETF
This is an American ETF listed in the United States. This is by far the most popular value style ETF. Its management fee is very low at only 0.15%. As indicated, the fund invests in undervalued companies. These companies can be medium or large caps.
Portfolio as of May 14
Name
Weight (%)
AT&T INC
6.88
INTEL CORPORATION CORP
6.75
MICRON TECHNOLOGY INC
3.58
GENERAL MOTORS
3.45
INTERNATIONAL BUSINESS MACHINES CO
3.07
CITIGROUP INC
2.36
CISCO SYSTEMS INC
2.12
TARGET CORP
2.11
APPLIED MATERIAL INC
1.87
FORD MOTOR CO
1.82
MDYV – SPDR S&P 400 Mid Cap Value ETF
The fund invests in equities with the strongest value characteristics based on: the book value / price ratio; benefit / price ratio; and sales / price ratio.
Portfolio as of May 14
Name
Weight
Steel Dynamics Inc.
1.00%
Owens Corning
0.87%
East West Bancorp Inc.
0.87%
Reliance Steel & Aluminum Co.
0.85%
First Horizon Corporation
0.83%
Jones Lang LaSalle Incorporated
0.80%
Lear Corporation
0.80%
Alleghany Corporation
0.78%
AECOM
0.77%
Kohl’s Corporation
0.76%
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.
Intro
Growth ETFs specializing in the financial sector (Banking and Insurance) have been on the rise since the start of the year. In this post, we will discuss the factors that favored the good performance achieved and also the risks that could impact it in the short term. We will discuss the top 5 financial sector ETFs that performed best in Canada in 2021. We limited ourselves to funds with assets under management greater than $ 100 million.
Positive factors
In fact, several factors helped increase the performance of these ETFs:
– The expected increase in interest rates generally favors retail banks in the long term;
– The majority of banks found themselves with exceptional results following the reversal of provisions set for the pandemic. Now that the vaccination is going better than expected (especially in the United States), the banks have ruled that these provisions are no longer relevant. The reversal of these provisions resulted in record profits;
– The segment behind banks’ profitability in the first quarter of 2021 is trading and investment banking activities. The level of trading activities led by small investors lately is really high. This high interest by individual investors in the financial markets was fueled by social media such as Reddit groups. Obviously, Banks benefited from this enthusiasm because of the increase in commissions earned. However, historically this kind of profit can quickly collapse with the slightest major correction in the stock market. American banking executives call this kind of income a “one time deal”.
The three largest US banks (JPMorgan, Goldman and Wells Frago) reported results better than expected by analysts in the first quarter of the year. However, not all segments performed well. Thus, traditional activities (deposits and loans) experienced performance below expectations. JP Morgan executives have even warned that they do not expect any improvement in the short term for this segment. They added that household spending should increase to return to pre-pandemic levels later this year, but that activities related to loans and credits in general should resume more slowly. Hence, revenues should remain either flat and improve slowly by the end of the year.
Note that you may gain exposure to the US financial sector by purchasing US listed ETFs. Below is the list of American ETFs that specialize in the financial sector. This can be tax-efficient if held in a registered account (RRSP).
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.
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.
Holding details as of May 13th
Weight (%)
Name
5,51%
WELLS FARGO & CO
5,35%
AMERIPRISE FINANCIAL INC
5,31%
US BANCORP
5,24%
BANK OF AMERICA CORP
5,17%
CITIZENS FINANCIAL GROUP INC
5,13%
PNC FINANCIAL SERVICES GROUP INC/THE
5,13%
KEYCORP
5,11%
FIRST REPUBLIC BANK/CA
5,10%
FIFTH THIRD BANCORP
4,96%
M&T BANK CORP
FLI – CI First Asset US Cda Lifeco Income ETF
FLI invests in a portfolio of stocks of major North American life insurance companies.
The fund has the following objectives:
i) quarterly cash distributions;
ii) the possibility of capital appreciation; and
iii) lower overall volatility of returns.
Name
%
LINCOLN NATIONAL CORP
10,84
PRUDENTIAL FINANCIAL INC
10,35
METLIFE INC
10,28
GREAT WEST LIFECO INC
10,00
PRINCIPAL FINANCIAL GROUP INC
9,87
UNUM GROUP
9,76
AFLAC INC
9,75
SUN LIFE FINANCIAL INC
9,29
MANULIFE FINANCIAL CORP
9,12
GLOBE LIFE INC
8,99
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 FINANCIAL
9,75
CITIGROUP INC
9,62
ING GROEP NV
7,90
BURFORD CAPITAL LTD
6,09
CONDUIT HOLDINGS LTD
4,46
EQUITABLE HOLDINGS INC
4,43
EAST WEST BANCORP INC
4,24
ATHENE HOLDING LTD
3,96
MONETA MONEY BANK AS
3,91
MANULIFE FINANCIAL CORP
3,76
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
Research firms track a wide array of stocks. Their analysts issue regularly stock recommendations that range from Sell to Strong buy. They also set price targets for the stocks they analyze. In this article, we will use their research to identify stocks with the highest upside potential.
Methodology
Selected only stocks with market capitalization above 300 M $;
Only stocks followed by 5 analysts or more were included;
Only stocks with high upside potential were considered. To be conservative, we used only the lowest target price set by the analysts. See below the formula:
Upside potential = (lowest target price – Current price ) / Current price
As you can see below, the stocks selected are either in Biotechnology or Mining. Both sectors are the riskiest investment someone can find in the stock market. For instance, Biotech stocks are often small, cash-strapped, and have a future inextricably tied to the success or failure of one clinical trial.
Please note, Analysts’ recommendations remain estimates based on hypothetical scenarios of future growth. They can be accurate or completely off. Always consult a financial advisor before making a financial decision.
Results (Top 10)
Table below show the top 10 stocks with the highest upside potential as per research firms. We included in this post a discussion surrounding the top 5 stocks. The remaining stocks we will share just a quick profile and the stats.
Aurinia Pharmaceuticals Inc., a biopharmaceutical company, develops and commercializes therapies to treat various diseases with unmet medical need in Japan and China. The company offers LUPKYNIS for the treatment of adult patients with active lupus nephritis. Aurinia market cap is 1.7 Billion dollars. Revenues almost doubled in the past 5 years.
On May 12th, Aurinia was trading at 14.14$. The lowest target price set by analysts is 27.2$. So, there is a 92.36% potential upside as per analysts’ research. This stock lost 43.62% of its value in past 12 months. Sales of the biotech’s newly approved lupus nephritis medication Lupkynis (aka voclosporin) failed to reach analysts’ estimate. This seems to be the main reason why investors were disgruntled with the stock.
Trillium Therapeutics Inc., a clinical stage immuno-oncology company, develops therapies for the treatment of cancer. Trillium market cap is 1.1 Billion dollars.
Trillium focused lately its resources on cancers of the blood and solid tumors via intravenous administration. The company raised recently more than 300 million dollars through two rounds of fundraising and a $25 million investment from Pfizer.
Village Farms International, Inc., together with its subsidiaries, produces, markets, and distributes greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. It operates through three segments: Produce Business, Energy Business, and Cannabis and Hemp Business. Village Farms market cap is 822 Million dollars. The company’s revenues grew by only 3.9% in the past 5 years.
This stock lost 54% of its value in the past 3 months alone. Its recent financial results showed weakness (EBITDA falling 63% from 1.1 M to just 400 K). The decline can be explained by:
Lower profit due to historically weak tomato prices;
Unbranded sales of Marijuana products fell 49%.
Financial statements showed some improvements such as a 20% increase in sales of Marijuana branded products. It seems investors were not satisfied overall and chose to sell on the news driving the stocks price down.
Endeavour Mining Corporation operates as a multi-asset gold producer in West Africa. Endeavour Mining Corporation was incorporated in 2002 and is based in London, the United Kingdom.
The company reported C$1.33 EPS for the last quarter, topping analysts’ consensus estimates of C$0.91 by C$0.42. The business had revenue of C$721.26 million during the quarter, compared to analysts’ expectations of C$715.49 million.
Americas Gold and Silver Corporation engages in the acquisition, exploration, development, and operation of mineral properties in North America. It explores for silver, lead, zinc, copper, and gold deposits.
Recently the stock declined following labor issues in Mexico in one of its mines. Top executive of Americas Gold and Silver Corp mentioned in BNN (March 22nd) that he is optimistic the issue can be resolved. The shut down has lasted about 14 months so far.
BELLUS Health Inc., a clinical stage biopharmaceutical company, develops therapeutics for the treatment of chronic cough and other hypersensitization disorders.
Calibre Mining Corp., together with its subsidiaries, engages in the acquisition, exploration, and development of gold properties in Nicaragua. The company primarily explores for gold, silver, and copper deposits.
