September 27, 2008 at 1:00 am by Tom Lydon
Canada’s status as an economically freer country than the United States could pay off for its exchange traded fund (ETF).
The United States is no longer the leader of the laissez faire, as Canada has more of it, and this is before the the U.S. government nationalized most of the mortgage industry and bought the world’s biggest insurance company, reports Will Wilkenson for Marketplace.
While Canada is behind the United States in free speech and the right to bear arms in self-defense, it has surpassed us as the land of the free: gay marriage is legal, you can dodge the draft and smoke funny cigarettes without fear of reprisals.
Canada still faces its own obstacles, however. Stagnation is setting in and softening housing construction is adding to a tightening credit market. The recovery is anticipated to be slow and steady. The Canadian Press reports that the projections for Canadian economic growth is at 0.6% for this year, and 1.3% for 2009.
iShares MSCI Canada (EWC) is down 13.5% year-to-date.
Financial services in EWC is weighted at 30.1%, while energy accounts for 27.9% and industrial materials is weighted at 21.2%, fairly concentrated among the top holdings. Canada is facing struggles similar to those fought in the United States, such as tight credit, high energy and food costs and a slow housing market, coupled with slow economic growth.
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