In February, notable market events include the Dow Jones soaring above 50,000 for the first time in history. Bitcoin was down about 45% from his high in October. Gold bullion rose to US$5,278 per ounce by month-end, keeping the gold trade enticing.
Crude oil prices were up due to geopolitical risk front and center with heightened tension between the U.S. and Iran.
The geopolitical risk also added to some of the wavering concerns in the market around the AI disruption where we saw people exiting first and asking questions later creating what felt like a reckoning in the AI trade. Investors may be running towards real assets over digital assets, favouring staples and defensives.
The top performers for the month of February was a mixed bag of funds. The SavvyLong (2X) Cdn Natural Resources ETF (CCQU-T) generated 40.66% price return. The SavvyLong 2X NBC (NA) Equity-Linked ETF (NBCU-T) had a 37.86% percentage increase. The third best performer based on price alone was held by Harvest Agnico Eagle Enhanced High Income Shares ETF (AEME-T) with a return of 31.96%.
Meanwhile, February welcomed 37 new fund solutions to the Canadian ETF marketplace.
LongPoint ETFs
LongPoint Asset Management added two single stock ETFs to its Savvy ETF suite that provide short exposure to Coinbase Global Inc. (COID-T) and Strategy Inc. (MSTZ-T). These funds will use cash borrowing, short selling and/or derivatives to achieve investment results, which will be two times the inverse daily return on the underlying stock.
BMO ETFs
BMO Asset Management Inc. launched twenty-one new funds in February, five of which track MSCI indices. The BMO MSCI Canada IMI High Dividend Yield Index ETF (ZDIV-T), BMO MSCI EAFE Small-Mid Cap Index ETF (ZESM-T), and BMO MSCI USA Equal Weight Index ETF (ZEQL-T, ZEQL-U-T, ZEQL-F-T) are designed to replicate the performance of their respective indices mentioned the fund name. The other sixteen funds were created with the goal of providing monthly payouts that have a targeted distribution range while benefiting from covered call strategies. Apart from the BMO All-Equity ETF (ZEQ-T-T), the target cash flow units were added to the suite of covered call strategies that include:
BMO Canadian High Dividend Cover Call ETF (ZWC-T-T)
BMO Covered Call Canadian Banks ETF (ZWB-T-T)
BMO Covered Call Dow Jones Industrial Average Hedged to CAD ETF (ZWA-T-T)
BMO Covered Call Energy ETF (ZWEN-T-T)
BMO Covered Call Health Care ETF (ZWHC-T-T)
BMO Covered Call Spread Gold Bullion ETF (ZWGD-T-T)
BMO Covered Call Technology ETF (ZWT-T-T)
BMO Covered Call US Banks ETF (ZWK-T-T)
BMO Covered Call Utilities ETF (ZWT-T-T)
BMO Europe High Dividend Covered Call ETF (ZWP-T-T)
BMO Europe High Dividend Covered Call Hedged to CAD ETF (ZWE-T-T)
BMO Global High Dividend Covered Call ETF (ZWG-T-T)
BMO US High Dividend Covered Call ETF (ZWH-T-T)
BMO US High Dividend Covered Call Hedged to CAD ETF (ZWS-T-T)
Mackenzie ETFs
Mackenzie Investments Portfolios Group Inc. introduced four new exchange-traded funds based on established mutual fund strategies. The Mackenzie Global Value ETF (MSGV-T) provides exposure to stocks across developed and emerging markets. The Mackenzie US All Cap Growth ETF (MAUG-T) invests primarily in growth stocks domiciled in the US. The Mackenzie US Value ETF (MAUV-T) concentrates on high-quality undervalued US companies with strong financials and cash flows. The Mackenzie GQE Global Balanced ETF (MBQG-T) provides access to a broadly invested global portfolio of equities and fixed income.
Russel ETFs
Russel Investments Canada Limited expanded its Canadian offering with five new funds on the TSX, which includes two fixed income and three equity solutions. The Russell Investments Fallen Angels ETF (HALO-T) employs a fallen angels strategy which targets corporate bonds that have been downgraded from investment grade to high yield. The Russell Investments Core Plus Fixed Income ETF (RBND-T) combines Russell Investments’ flagship active fixed income approach with its proprietary fallen angels exposure. The strategy invests 80% in Russell Investments Fixed Income Pool ETF Series and 20% in Russel Investments Fallen Angels ETF.
The three equity funds are based on proven multi-factor strategies available in a mutual fund structure. The Russell Investments Multi-Factor Canadian Equity Pool (RQCA-T), Russell Investments Multi-Factor International Equity Pool (RQIN-T), and Russell Investments Multi-Factor US Equity Pool (RQUS-T) each have a management fee of 0.30%.
CIBC ETFs
CIBC Asset Management Inc. launched four new Avantis CIBC ETFs to its suite of offerings. This series was developed in collaboration with Avantis Investors, an investment outfit by American Century Investments Inc. The Avantis CIBC U.S. All-Cap Equity ETF (CAUS-T) invests in US equity securities of all sizes and across multiple industries. The Avantis CIBC U.S. Large Cap Value ETF (CALV-T) focuses and US large cap equity securities. The Avantis CIBC U.S. Small Cap Value ETF (CAUV-T) invests in US small cap equity securities. Finally, the Avantis CIBC Canadian Equity ETF (CACA-T) concentrates on Canadian equity securities across a broad range of sectors and market capitalizations.
Other launches
Middlefield Limited launched the Middlefield Short Duration Bond Plus ETF (MSBP-T) is an actively managed portfolio of short-duration U.S. and Canadian corporate and government fixed income securities. The investment strategy is characterized by lower volatility and limited interest rate sensitivity through a short duration profile.
Lastly, Purpose Investments listed the Purpose Credit Opportunities Class (CROC-T), a total-return portfolio that generates tax-efficient distributions, centering on the best opportunities in credit.
Amy Mak is ETF Specialist at Inovestor.
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