Exchange-traded funds (ETFs) offer a cost-effective and diversified way to invest in several securities, such as stocks, bonds, or commodities. Also, since ETFs trade on stock exchanges, they provide investors with greater liquidity and flexibility. Today, we have shortlisted three Canadian ETFs – CI Morningstar Canada Momentum Index ETF (TSE:WXM), Guardian Canadian Focused Equity Fund Trust Unit (TSE:GCFE), and CI Morningstar Canada Value Index ETF (TSE:FXM) – with more than 10% upside potential projected by analysts over the next twelve months.
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Let’s take a deeper look at these three ETFs.
CI Morningstar Canada Momentum Index ETF
The WXM ETF aims to achieve capital growth by investing in a diversified portfolio of Canadian equity securities that shows positive earnings and price momentum. It seeks to replicate the performance of the Morningstar Canada Target Momentum Index, net of expenses.
WXM has $586.06 million in assets under management (AUM), with the top 10 holdings contributing 34.42% of the portfolio. Importantly, it has a low expense ratio of 0.74%. The WXM ETF has returned 33.17% year-to-date.
Overall, the WXM ETF has a Moderate Buy consensus rating. Of the 31 stocks held, 28 have Buys and three have a Hold rating. At C$36.08, the average WXM ETF price target implies a 12.1% upside potential.
Guardian Canadian Focused Equity Fund Trust Unit
The GCFE ETF seeks to achieve long-term capital growth by investing in Canadian equity securities. Importantly, the fund targets companies with strong growth potential and solid fundamentals.
The ETF has $4.34 million in AUM and an expense ratio of 0.76%. Its top 10 holdings contribute 64.28% of the portfolio. So far in 2024, GCFE ETF has generated a return of 35.19%.
On TipRanks, GCFE has a Moderate Buy consensus rating based on 16 Buys and seven Holds assigned in the last three months. At C$33.80, the average GCFE ETF price target implies 15.42% upside potential.
CI Morningstar Canada Value Index ETF
The FXM ETF invests in a diversified portfolio of Canadian equity securities with low price-to-earnings and price-to-cash flow ratios. It aims to replicate the performance of the Morningstar Canada Target Value Index, net of expenses.
The FXM ETF has $305.71 million in AUM and an expense ratio of 0.76%. Its top 10 holdings contribute 34.49% of the portfolio. Year-to-date, FXM ETF has generated a return of 27.3%.
Overall, FXM has a Moderate Buy consensus rating based on 25 Buys and six Holds assigned in the last three months. At C$29.57, the average FXM ETF price target implies a 15.52% upside potential.
Concluding Thoughts
ETFs are a low-cost, diversified, and transparent way to participate in the market. Investors looking for potential recommendations could consider WXM, GCFE, and FXM ETFs due to the upside potential expected by analysts.
