Invesco is one of the top global fund managers and it recently made another product available to Canadian investors. Horizons has also become one of the largest Canadian ETF managers by launching creative new products.
INVESCO MORNINGSTAR GLOBAL ENERGY TRANSITION ETF $19.43 (Toronto symbol IGET) invests globally in companies that are expected to benefit from the quest to address climate change and reduce greenhouse gases.
The ETF aims to track the Morningstar Global Energy Transition Index. Companies are selected from the global universe and portfolio weights are allocated based on the market value of each company. The ETF launched on July 14, 2023 and holds $1.0 million in assets. The management fee is 0.35%.
Companies domiciled outside of North America make up 62% of the portfolio, while U.S. (34%) and Canadian companies (4%) contribute the balance. Industrials is the largest sub-group (32%), while materials, utilities, technology, and energy are other major sub-components.
The ETF currently holds 41 stocks—top holdings include Linde plc, NextEra Energy, Siemens, Eaton Corp., Air Liquide and ABB.
This ETF is okay to hold, but only if you wish to invest in this particular theme.
HORIZONS ENHANCED EQUAL WEIGHT BANKS INDEX ETF $19.19 (Toronto symbol BNKL) invests in the six largest Canadian banks. The fund also applies a moderate degree of borrowings to enhance the returns and yield.
The ETF tracks the Solactive Equal Weight Canada Banks index. Given the leverage (debt) applied, the total return will be 1.25 times the return of the index. The ETF launched on July 5, 2023, and has gathered $6.5 million in assets. The management fee is 0.35%. The manager intends to pay a monthly distribution, with a target yield of 6.1%.
With this ETF, you need to keep in mind that leverage works two ways: It magnifies your profits when the market direction moves in your favour—but it magnifies your losses just as effectively when the market moves against you.
We like all of the Big Five Canadian banks. But we think there are better ways to invest in their stocks. We don’t recommend this ETF.