Join Fund Library now and get free access to personalized features to help you manage your investments.
The S&P/TSX Composite Index is up 20.7% so far this year, as of the close of trading on Oct. 29. The S&P 500 was ahead 22.6% to that point. That means if you invested in a plain vanilla TSX or S&P 500 index fund, you’ve done quite well so far in 2021.
The iShares Core S&P/TSX Capped Composite Index ETF (TSX: XIC) is up slightly more than 17% year-to-date, including distributions. The iShares Core S&P 500 Index ETF (CAD- Hedged) (TSX: XSP) is ahead 15.6%. No one is likely to complain about that.
But there are some ETFs out there that have returned significantly higher gains than the TSX or the S&P 500 to date. They are sector funds, so by definition, they are higher risk. But if you want to roll the dice with some of your money, they are worth a look.
Here are three from the recommended list of my Internet Wealth Builder newsletter.
Harvest Portfolios Blockchain Technologies Fund (TSX: HBLK). The fund was first recommended in January 2019 at $5.85. It closed Oct. 29 at $27.56.This ETF invests a cross section of large cap established companies and stand-alone blockchain companies. This means the portfolio is a mix of high-profile names like DocuSign and Square Inc. to unfamiliar companies such as Riot Blockchain and Coinbase Global. About 23% of the portfolio is large-cap stocks, the rest are what Harvest describes as “emerging,” which is why it is ranked as a high-risk fund.
The ETF was launched in January 2018, and its track record so far has been impressive. As of June 30, its three-year average annual compound rate of return was 47.7%. Year to date, it’s ahead about 53%. There have been no distributions, so this is purely a capital gains play.
HBLK has only $49.2 million in assets under management, which means not many people have discovered it yet. The management fee is 0.65%.
Global X Lithium and Battery Technology ETF (NYSE: LIT). This ETF invests in the full lithium cycle, from mining and refining the metal, through battery production. It was first recommended in August 2016 at $24.56 (figures in U.S. dollars). It closed Oct. 29 at $91.91.
Almost half the 38 companies in the fund are based in China, and unless you are a lithium junkie, you will probably have never heard of most of them. Top holdings include Albemarle Corp. (12.2%), Ganfeng Lithium Co. (7.5%), and Yunnan Energy (6.8%).
The only household name in the top 10 holdings is Samsung, at 3.8%.
The fund was launched in 2010, but it has only been in recent years that it has really taken off. Over the past three years it has generated an average annual compound rate of return of 38.1% to Sept. 30. This year it’s poised to exceed that by a wide margin. It has posted a capital gain year-to-date of $30.02 plus investors received a small distribution of $0.036 in June for a total return of 48.5% thus far in 2021.
Total assets under management are almost $4.2 billion. The expense ratio is high at 0.75%.
CBRE Global Real Estate Income Fund (NYSE: IGR). Real estate funds were so badly battered in 2020 that it’s no surprise they have rebounded so strongly this year. As the name implies, this is an international real estate fund with about 63% of its assets in the U.S. and the rest scattered in several countries, from the U.K. to Japan. In total, it has 84 holdings.
The ETF ended 2020 priced at $6.88 (figures in U.S. dollars). It closed Oct. 29 at $9.16, plus investors received seven monthly distributions of $0.05 each for a total year-to-date gain of 40%. The long-term track record is also impressive, with a five-year average annual compounded rate of return of 8.5% to Sept. 30.
This ETF has about $1.4 billion in assets. The management fee is high at 0.85%.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
Follow Gordon Pape on Twitter at https://twitter.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
Notes and Disclaimer
© 2021 by The Fund Library. All rights reserved. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
Join Fund Library now and get free access to personalized features to help you manage your investments.
Fund Library
