Recently we’ve seen bullish call buying in an exchange traded fund that grants exposure to the Canadian equity market, iShares MSCI Canada (NYSEArca: EWC).
After flirting with its 50 day moving average for about two weeks, the ETF finally gapped higher late last week and is now within shouting distance of its 200 day moving average ($30.77 a share).
The index fund, which is heavy financials and energy names, making up about 50% of the holdings, has lagged both the U.S. domestic equity market as measured by the S&P 500 as well as the MSCI EAFE year to date, (down 6.48% versus S&P 500 up 2.33% and MSCI EAFE down 5.09%).
Recent activity suggests that investors may be positioning for a run up in the country heading into year’s end.
EWC has been publicly traded since 1996, and in recent years a number of other Canadian focused ETFs have come to the marketplace to offer investors different exposures to the country, which is natural resource rich.
For instance, Guggenheim Canadian Energy Income Fund (NYSEArca: ENY) invests in equities that are classified as oil and gas producers in the royalty trusts and oil sands resources categories.
IQ Canada Small-Cap ETF (NYSEArca: CNDA) owns small cap equities listed in Canada and offers obviously different exposure than the large cap tilted EWC.
Global X Canada Preferred (NYSEArca: CNPF) invests in select preferred stocks that trade in Canada, based on the Solactive Canada Preferred Index.
Finally, Global X S&P/TSX Venture 30 Canada (NYSEArca: TSXV) invests in the the 30 most liquid equities that trade on the the TSX Venture Exchange in Canada. CNPF and TSXV both debuted earlier this year and thus do not quite have one year of live performance under their belts yet, but year to date, ENY has lost 13.15% and CNDA has fallen 16.42%.
iShares MSCI Canada (NYSEArca: EWC)
For more information on Street One ETF research and ETF trade execution/liquidity services, contact pweisbruch@streetonefinancial.com.