ETF Chart of the Day: Oh Canada

We are following several headlines this morning reporting alleged gunfire that is occurring near Parliament Hill in Ottawa, Canada this morning, as the story is still developing.

It is unclear if there is one or multiple shooters, and motives and possible identities are also not known at this time. This does however remind us that potential terror plots and headlines are still making their way into the daily news flow at times.

The largest Canada based ETF in the U.S. listed landscape is EWC (iShares MSCI Canada, Expense Ratio 0.48%), having debuted back in 1996 and holding a massive advantage in terms of AUM over its next closest competitor. EWC currently has about $3.09 billion in assets under management and that is in spite of seeing more than $200 million flow out of the fund year to date.

The second largest fund in this space is the lesser known FCAN (First Trust Canada AlphaDEX, Expense Ratio 0.80%) which debuted in early 2012, but has notably attracted more than $140 million in AUM since inception.

The composition of these two ETFs looks rather different head to head as EWC is large cap oriented, with top holdings of Royal Bank of Canada (>7.4%), Toronto Dominion Bank (>6.6%), Bank of Nova Scotia (>5.4%),
Canadian National Railway Co. (>4.2%), and Suncor Energy Inc. (>3.8%). The fund has a notable mega/large cap lean (about 75% of the portfolio resides in the mega/large cap realm), and rather heavy concentration in Financial Services names (>34.5%) and Energy (>23.9%).

FCAN on the other hand employs the growing AlphaDEX methodology which has the effect of a modified equal weight index over time with a fundamental selection driven criteria in place in terms of initially ranking and screening index components for investment.

Top holdings of FCAN at the time being are little known companies like CCL Industries Inc. (>4.8%), Boardwalk Real Estate Investment Trust (>4.7%), Gibson Energy Inc. (>4.6%), Westjet Airlines Ltd. (>4.2%), and Dream Office Real Estate Investment Trust (>4.2%), in many cases with ordinary shares being owned in the portfolio.