Q – I read an article in the G&M titled “16 Outperforming Passive ETFs” by Ian Tam and wanted to ask for your opinion. The ETF that caught my attention was the Horizons Europe 50 Index ETF (TSX: HXX). It interests me because of the foreign content aspect and the need to diversify out of North America inside my wife’s RRSP. Its performance is respectable over the last five years, and it even outperformed the S&P this year. – Paul C.

A – HXX invests in 50 of the largest companies in Europe. European stocks had lagged until 2023 when it delivered its best annual performance since it was launched in late 2016 with a gain of 23.8%. The five-year average annual compound rate of return was 10.2%. The MER is 0.19%.

I checked the results of European stock funds from BMO, iShares, Vanguard, CI, and Brompton. Only the CI WisdomTree Europe Hedged Equity Index ETF (TSX: EHE.B) comes close to matching the Horizons fund in 2023 returns, However, it’s an inferior performer over five years with an average annual compound rate of return of 7.4%. The MER is also much higher, at 0.6%.

In this category, the Horizons fund looks like the best choice for your wife’s RRSP. – G.P.