Canada ETFs: An Indirect Commodity Play

January 21st at 1:00am by Tom Lydon

Demand for commodities is at an all-time high, and many experts believe it’s going to remain there. If you’re looking for an indirect way to play the boom, Canada’s exchange traded funds (ETFs) can give you your fix.

Natural resources are no small part of the Canadian economy.

The International Monetary Fund projects 3% growth for the economy, and a mix of energy and raw materials as well as grains and agricultural minerals will play a role. [Canada ETFs: The Case for Our Northern Neighbors.]

Canada is the world’s largest producer of zinc and uranium, as well as a positive producer of gold, nickel, aluminum and lead – all of which are commodities that fast-growing nations in Asia and Latin America are in need of, explains Kevin Grewal for Seeking Alpha. [Can Canada ETFs Get Back On Track?]

  • iShares MSCI Canada (NYSEArca: EWC): The broad Canada ETF, which contains a mix of all Canada’s industries. Energy makes up 26% and materials make up 23.2%.
  • Guggenheim Canadian Energy Income (NYSEArca: ENY): ENY is a play on Canada’s energy sector; as such, it has a number of Canadian oil companies in its top holdings.
  • IQ Canada Small-Cap ETF (NYSEArca: CNDA): If you get small-cap exposure, then you’re more exposed to the local economy than large-cap funds, which tend to hold multi-national corporations.

Tisha Guerrero contributed to this article.

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.