WP creates a truly Canadian ETF

WP creates a truly Canadian ETF

WP creates a truly Canadian ETF No, we’re not getting into the fund business. However, our latest poll asks advisors if they would recommend it.

The original idea for our latest poll comes from a list of six new ETFs the Globe and Mail profiled in November. One of those funds, the Purpose Investments Best Ideas Fund ETF (PBI), is a group of 25 stocks held by 20 of the world’s best investment managers. Equal-weighted and rebalanced quarterly, it’s performed admirably since its inception April 29, 2014, up 15%.

The only problem with PBI? Its list of investment managers is entirely American. Not one is Canadian. We seek to change that. 

WPs gone ahead and pulled together 15 of the biggest and best money managers operating in Canada. Using a very rudimentary selection process — the winners in the equities category of the 2014 Morningstar Canadian Fund Awards – we’ve selected the top two holdings from each of the funds victorious in this year’s awards held in November.

So, for example, Martin Ferguson and Jeff Mo are the co-managers of the Mawer New Canada Fund, winners of Morningstar’s domestic equity fund manager of the year award. The top holding in this fund is Constellation Software, followed by Home Capital Group. These two are added to the list and we’re on our way to 22 holdings.

Why 22 when there are 15 fund managers? Some are co-managers which reduces the total funds represented to 11. One more thing — we won’t duplicate stock picks so if another fund has Constellation as the top holding, we’ll choose the second-largest and so on.

Here’s the list:

Martin Ferguson and Jeff Mo, Mawer New Canada, Constellation Software and Home Capital Group

Tye Bousada and Geoff MacDonald, EdgePoint Global Portfolio, TE Connectivity and Alere

Alan Wicks, Manulife Monthly High Income, Loblaw Companies and JPMorgan

Jennifer McClelland and Brahm Spilfogel, RBC GAM Canadian Equity Income, Royal Bank of Canada and Suncor Energy

Brandon Snow, CI Cambridge Pure Canadian Equity, CGI Group Class A and Tourmaline Oil

Gerardo Zamarano, Brandes Emerging Markets Equity, Samsung Electronics and Embraer S.A.

Carl Kawaja, Capital Group Global Equity, Microsoft and Novo Nordisk

Paul Moroz, Mawer Global Small Cap, NCC Group and Cineworld

David Ragan and Jim Hall, Mawer International Equity, Aon PLC and Roche Holding

Andrew Waight, CI Global Health Sciences, Intercept Pharmaceuticals and Boston Scientific

Jim Young, Trimark U.S. Companies, Apple and ACE

If you invested $100,000 equally amongst all 11 funds on December 12, 2011, today it would be worth $161,000. That’s an annualized return of 17.2%, more than double the return of the iShares Core S&P/TSX Capped Composite Index over the same period.

Of course we know that past performance doesn’t equal future performance. In fact, active management usually underperforms (reverts to the mean) after an extended period of outperforming the markets.

So, our poll for this week is: Would you invest in a Canadian version of Purpose Investments’ Best Ideas fund? Click here to vote.