ETF Spotlight on iShares MSCI Canada (NYSEArca: EWC), part of an ongoing series.
Assets: $5.7 billion.
Objective: The Canada ETF tracks a broad index of Canadian stocks.
Holdings: Top holdings include: Royal Bank of Canada 6.01%, Toronto Dominion Bank 5.52%, Bank of Nova Scotia 4.78%, Suncor Energy 4.53% and Potash Corp of Saskatchewan 3.60%.
What You Should Know:
- EWC has an expense ratio of 0.53%.
- The fund has 102 holdings.
- Sector allocations include: Financials 32.22%, Energy 27.48%, Materials 20.62%, Industrials 5.76%, Consumer Discretionary 3.91%, Telecom Services 2.93%, Consumer Staples 2.84%, Info Tech 1.70%, Utilities 1.16%, Health Care 1.11% and other 0.26%.
- “Investors already loaded up on commodities and bearish U.S. dollar bets should be wary of doubling down on them with this fund,” according to Morningstar analysts. “About 3.7 percentage points of Canadian stocks’ outperformance comes from an appreciating loonie.” (CurrencyShares Canadian Dollar Trust)
- Canada’s oil reserves are second only to Saudi Arabia. The country is also a major producer of minerals, natural gas and agricultural commodities.
- “With the correlation between commodity prices and Canada’s stock so high, EWC can be seen as an indirect play on emerging markets and commodities,” the Morningstar analysts added.
The Latest News:
- Manufacturing sales diminished a slightly worse-than-expected 0.8% in May from April as 72% of the manufacturing industry revealed weaker numbers, reports Randall Palmer for Reuters. Bank of Canada Governor Mark Carney stated that growth might be in the 1% level for the quarter, followed by a rebound in the second half.
- The Bank of Canada calculated that the economy slowed to 2% but projects GDP to expand up to 2.7% in the third quarter, according to The Province.
- Annual inflation rates are expected to drop from the eight-year high of 3.7% in May, but they may still be above the central bank’s target range of 1% to 3%, Reuters reports. The central bank is expected to keep target overnight rates unchanged at 1% in its next meeting, according to the report.
For past stories in this series, visit our ETF Spotlight category.
iShares MSCI Canada
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.