Canada ETF Rises With the Loonie
November 7th, 2007 at 1:00pm by Tom Lydon
North of our border is heating up, and taking the Canadian exchange traded fund (ETF) with it. The manufacturing, service and mining sectors are growing and they’re the same sectors that create investment opportunity, reports Tony Sagami for Money and Markets. Consider that the Canadian dollar, the loonie, has appreciated 65% against its American counterpart over the last 5 years. The loonie continues to rise versus the U.S. dollar, and it has beat the euro, the yen, the Brazilian real and others. The country has its natural resources to thank.
This economic flight should continue as Canada has a surplus of coal, timber and natural gas. Canada is also the U.S.’s major supplier of natural resources and draws on gas and uranium to do so. Sagami also says Canada is another way to play Asia’s boom, as it is now the fourth largest natural resource supplier to China, tripling in the past three years. iShares MSCI Canada Index (EWC) focuses 31% to financial and 27% to natural resource stocks. It reached a new high yesterday and is up 44.2% year-to-date. CurrencyShares Canadian Dollar Trust (FXC) can let you play the rising loonie; it is up 31% year-to-date.
For full disclosure, some of Tom Lydon’s clients own EWC.
Read the disclosure, as Tom Lydon is a board member of Rydex Investments.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.