Short-Term Trade Idea With Canada ETFs

The energy and materials sectors combine for 37.4% of EWC’s weight. The IndexIQ Canada Small Cap ETF (NYSEArca: CNDA), which allocates nearly two-thirds of its combined weight to the energy and materials sectors, is up 11.5% this year compared to a 3% loss for the iShares Russell 2000 ETF (NYSEArca: IWM). [Global Small-Cap ETFs Shine]

EWC has also been buoyed by strength among Canadian bank stocks. The financial services sector accounts for nearly 37% of the ETF’s weight and the five bank stocks found among the fund’s top-10 holdings have returned an average of 4.4% this year. That compares with a 1% gain for the Financial Select Sector SPDR (NYSEArca: XLF).

Those looking for additional holiday-related opportunities with EWC should note Canadian stocks have a tendency to perform well around the time of the other U.S. holidays – Independence Day and Thanksgiving – when Canadian markets remain open, according to Thackray’s Investor’s Guide.

iShares MSCI Canada ETF

Tom Lydon’s clients own shares of IWM and SPY.