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 the third quarter of 2024, the top-performing ETFs included real estate equity funds Vanguard FTSE Canadian Capped REIT Index ETF VRE and Global X Equal Weight Canadian REITs Index Corporate Class ETF HCRE. Data in this article is sourced from Morningstar Direct.
Screening for the Best-Performing ETFs
To find the quarter'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.
Within our list, five funds fell into the real estate equity category, where the average name rose 16.14% in the third quarter.
The 10 Best-Performing ETFs for Q3 2024:
1. Vanguard FTSE Canadian Capped REIT Index ETF VRE
2. Global X Equal Weight Canadian REITs Index Corporate Class ETF HCRE
3. BMO Equal Weight REITs Index ETF ZRE
4. iShares S&P/TSX Capped REIT Index ETF XRE
5. Mackenzie China A-Shares CSI 300 Index ETF QCH
6. BMO MSCI China ESG Leaders Index ETF ZCH
7. iShares China Index ETF XCH
8. Middlefield Real Estate Dividend ETF MREL
9. BMO Junior Gold Index ETF ZJG
10. iShares Equal Weight Banc & Lifeco ETF CEW
Metrics for the Best-Performing ETFs
Vanguard FTSE Canadian Capped REIT Index ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.39%
• Morningstar Category: Real Estate Equity
The C$300 million Vanguard FTSE Canadian Capped REIT Index ETF was the best-performing ETF in the third quarter, with a 23.93% return. The passively managed Vanguard ETF beat the 16.14% gain on the average fund in Morningstar’s real estate equity category for the quarter. Over the last 12 months, the Vanguard FTSE Canadian Capped REIT Index ETF has returned 32.26%, outperforming the 27.19% gain on the average fund in its category, leaving the ETF in the 4th percentile.
The Vanguard FTSE Canadian Capped REIT Index ETF has a Morningstar Medalist Rating of Silver. It was launched in November 2012.
Global X Equal Weight Canadian REITs Index Corporate Class ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.33%
• Morningstar Category: Real Estate Equity
The second-best performing ETF in the third quarter was the C$42 million Global X Equal Weight Canadian REITs Index Corporate Class ETF. The passively managed Global X ETF returned 23.12%, outperforming the average real estate equity fund, which gained 16.14%. Looking back over the last 12 months, the Global X Equal Weight Canadian REITs Index Corporate Class ETF has returned 28.99%, outperforming the 27.19% return on the average fund in its category, leaving the ETF in the 22nd percentile.
The Neutral-rated Global X Equal Weight Canadian REITs Index Corporate Class ETF was launched in January 2019.
BMO Equal Weight REITs Index ETF
• Morningstar Rating: 3 stars
• Expense Ratio: 0.61%
• Morningstar Category: Real Estate Equity
The C$613 million BMO Equal Weight REITs Index ETF ranked third for the quarter, returning 23.01%. The BMO ETF, which is passively managed, topped the 16.14% average return on funds in the real estate equity category for the third quarter. Over the last 12 months, the BMO ETF has returned 28.54%, ahead of the 27.19% gain on the average fund in its category, leaving the ETF in the 31st percentile.
The BMO Equal Weight REITs Index ETF, launched in May 2010, has a Morningstar Medalist Rating of Neutral.
iShares S&P/TSX Capped REIT Index ETF
• Morningstar Rating: 1 star
• Expense Ratio: 0.61%
• Morningstar Category: Real Estate Equity
With a 22.90% return, the C$1.3 billion iShares S&P/TSX Capped REIT Index ETF ranked fourth in the quarter. The passively managed iShares ETF outperformed the 16.14% return on the average real estate equity fund. Over the last 12 months, the fund has gained 24.58%, behind the 27.19% return on funds in its category, placing it in the 86th percentile for the period.
The iShares S&P/TSX Capped REIT Index ETF has a Bronze Morningstar Medalist Rating. It was launched in October 2002.
Mackenzie China A-Shares CSI 300 Index ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.72%
• Morningstar Category: Greater China Equity
The fifth-best performing ETF was the C$31 million Mackenzie China A-Shares CSI 300 Index ETF, which gained 21.90% in the third quarter. This passively managed Mackenzie ETF beat the 15.95% average return on funds in the Greater China equity category. Over the past year, the Mackenzie China A-Shares CSI 300 Index ETF rose 14.67%, underperforming the 15.87% return on the average fund in its category and placing it in the 53rd percentile.
The Mackenzie China A-Shares CSI 300 Index ETF, launched in February 2018, has a Morningstar Medalist Rating of Silver.
BMO MSCI China ESG Leaders Index ETF
• Morningstar Rating: 1 star
• Expense Ratio: 0.67%
• Morningstar Category: Greater China Equity
The C$94 million BMO MSCI China ESG Leaders Index ETF was the sixth-best performing Canadian ETF in the third quarter, with a 21.30% return. The return on the passively managed BMO ETF topped the 15.95% gain on the average fund in Morningstar’s Greater China equity category. Looking back over the last 12 months, the BMO MSCI China ESG Leaders Index ETF has returned 17.91%, outperforming the 15.87% return on the average fund in its category, leaving the ETF in the 38th percentile.
The BMO MSCI China ESG Leaders Index ETF takes environmental, social, and governance criteria into consideration. This fund has a Morningstar Medalist Rating of Neutral.
iShares China Index ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.86%
• Morningstar Category: Greater China Equity
The seventh-best performing ETF in the third quarter was the C$137 million iShares China Index ETF. The passively managed iShares ETF returned 20.68%, outperforming the average Greater China equity fund, which gained 15.95%. Looking back over the last 12 months, the iShares China Index ETF has returned 22.56%, outperforming the 15.87% return on the average fund in its category, leaving the ETF in the 7th percentile.
The iShares China Index ETF has a Morningstar Medalist Rating of Neutral. It was launched in January 2010.
Middlefield Real Estate Dividend ETF• Morningstar Rating: 4 stars
• Expense Ratio: 1.23%
• Morningstar Category: Real Estate Equity
The C$144 million Middlefield Real Estate Dividend ETF ranked eighth for the quarter, returning 19.98%. The Middlefield ETF, which is actively managed, topped the 16.14% average gain on funds in the real estate equity category. Over the last 12 months, the Middlefield ETF has returned 28.94%, ahead of the 27.19% return on the average fund in its category, leaving it in the 25th percentile for performance.
The Silver-rated Middlefield Real Estate Dividend ETF was launched in April 2011.
BMO Junior Gold Index ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.61%
• Morningstar Category: Precious Metals Equity
With a 19.05% gain, the C$77 million BMO Junior Gold Index ETF ranked ninth in the third quarter. The passively managed BMO ETF outperformed the 15.81% return on the average precious metals equity fund. Over the last 12 months, the fund has returned 58.19%, ahead of the 49.37% return on funds in its category, placing it in the 10th percentile.
The BMO Junior Gold Index ETF, launched in January 2010, has a Morningstar Medalist Rating of Neutral.
iShares Equal Weight Banc & Lifeco ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.61%
• Morningstar Category: Financial Services Equity
The tenth-best performing ETF was the C$223 million iShares Equal Weight Banc & Lifeco ETF, which gained 18.24% in the third quarter. The actively managed iShares ETF beat the 12.69% average return on funds in the financial services equity category. Over the past year, the iShares Equal Weight Banc & Lifeco ETF rose 35.31%, outperforming the 33.89% return on the average fund in its category and placing it in the 37th percentile.
The iShares Equal Weight Banc & Lifeco ETF has a Morningstar Medalist Rating of Bronze. It was launched in February 2008.
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.
