Brace yourselves: 2025 was a year of surprising twists and turns for Canadian ETFs, with some sectors soaring to unimaginable heights while others faced unexpected setbacks. Did you miss the boat on the biggest opportunities? Let's dive into a recap of December's market activity and the ETF landscape, focusing on the winners, the losers, and the two new funds that emerged just before the New Year.
The year-end optimism was palpable as the S&P 500 edged closer to the 7000 mark, suggesting a strong Santa Claus rally. The major U.S. market indexes all boasted impressive double-digit gains, painting a picture of robust growth… or so it seemed.
The Federal Reserve fueled the fire by implementing its third interest rate cut of 2025 in December. However, Fed Chair Jerome Powell tempered expectations, emphasizing a cautious "wait and see" approach. He pointed to a slowing jobs market and fluctuating inflation data as reasons for continued vigilance. This delicate balancing act highlights the ongoing uncertainty in the economic outlook. But here's where it gets controversial: Some analysts argued Powell's caution was actually hindering potential growth, while others praised his measured response to complex economic signals. What do you think?
Bitcoin's journey was a rollercoaster. Despite hitting a record high of $126,000 per token in the fourth quarter, the digital asset ultimately ended the year at US$87,000, a roughly 6% year-over-year decline. The initial crypto ETF euphoria waned as flows significantly retreated by year-end. And this is the part most people miss: The volatility of Bitcoin serves as a potent reminder of the risks associated with digital assets, even within what many consider a "regulated" ETF structure.
On the other hand, gold and silver experienced a phenomenal December, culminating in historic annual gains unseen in four decades! Volatile trade policies throughout the year acted as a catalyst, propelling these precious metals to record highs. Gold surged above US$4,355 per ounce, while silver reached approximately $76 per ounce. These gains underscored the enduring appeal of precious metals as safe-haven assets during times of economic uncertainty.
Silver, in particular, had a remarkable surge. The iShares Silver Bullion ETF (SVR-T) led the charge, delivering a staggering 25.98% price return in a single month! The Ninepoint Silver Bullion ETF (SBUL-T) followed closely with a 22.06% return, and the Global X Silver Covered Call ETF (AGCC-T) rounded out the top three with a 19.09% increase. This runaway rally demonstrates the potential for significant short-term gains in specific commodity-focused ETFs.
Looking at the entire year, the top performers were dominated by gold-related ETFs. The Global X Gold Producers Index ETF (GLDX-T) emerged as the clear winner with a massive 175.4% gain. The BMO Equal Weight Global Gold Index ETF (ZGD-T) secured second place with a 170.04% return, and the Harvest Global Gold Giants Index ETF (HGGG-T) came in third with a 166.7% return. These impressive figures highlight the exceptional performance of the gold mining sector in 2025.
Despite the year-end flurry of distribution announcements, December was relatively quiet in terms of new ETF launches. Only two new funds entered the Canadian market:
The first is the Evolve Big Six Canadian Banks UltraYield Index ETF (SIXY-T). This fund provides exposure to a portfolio of Canada's six largest banks: Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Montreal (BMO), Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC), and National Bank of Canada (NBC). The fund aims to generate monthly income and enhance yield through a combination of modest leverage and a covered call strategy. But here's a question for you: Is investing in the Big Six banks, even with leverage and covered calls, a truly "ultra" yield strategy, or a relatively conservative play dressed up with a fancy name?
The second newcomer is the Global X Copper Producer Equity Covered Call ETF (CPCC-T). This fund focuses on investments in copper mining companies worldwide. By employing a dynamic, covered call strategy, CPCC-T seeks to generate monthly income for its investors. With the increasing demand for copper in various industries, particularly renewable energy and electric vehicles, this fund could potentially benefit from long-term growth trends.
Amy Mak, ETF Specialist at Inovestor, provided this insightful market overview.
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So, what are your thoughts on the ETF market's performance in 2025? Did you capitalize on the gold and silver surge, or were you caught off guard by Bitcoin's volatility? And what's your take on the new ETF launches – are they promising additions to the Canadian investment landscape, or just another set of options in an already crowded market? Share your opinions and predictions in the comments below!
