Canada Is Quiet, But Its ETF Is Showing Strength

April 4th at 6:00am by Tom Lydon

2893059300Canada has vast natural resources, aside from hockey players, and that’s evident in their exchange traded fund (ETF).

iShares MSCI Canada Index (EWC) is up 7.2% over the last two weeks. Although it’s down 2% year-to-date, it’s 2.8% above its trend line. Over the past five years, the ETF is up 27%, beating the S&P 500.

Canadian markets have boomed primarily because of global commodities demand. Silver, oil and copper are the most sought-after resources Canada offers. EWC is weighted at 30% financial services, 29% in energy, and 22% in materials, reports Todd Wenning for The Motley Fool. Financials are beginning to emerge, and with the extra boost from this sector, the ETF may rise to the occasion.

Natural resources are abundant in Canada, so this is where much of the strength lies. For instance, in January 2008, the United States imported 80 million barrels of oil from the North in contrast to 47 million from Saudi Arabia. Plus, the United States is in good standing with Canada, making this relationship more symbiotic.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.

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