Oh Canada: Remember This ETF

Canada’s oil production could either lift or weigh on the economy, depending on the energy market. Additionally, as we hear more about droughts and dry weather conditions, Canada’s freshwater reserves, which account for 20% of the world’s freshwater, could come into play.

EWC, the largest US-listed Canada ETF, holds 93 stocks. The $3 billion ETF allocates almost 43% of its weight to the financial services sector and 21% to energy stocks. Materials and industrial names combine for almost 18%.

“Even with its recent gains, the Canadian index is way behind its U.S. counterparts, which have hit a series of record highs this year,” according to Bloomberg. “The year-to-date gain for the S&P/TSX is just 4.4 percent versus 15 percent for the S&P 500. Canada still lags most developed markets, ahead of only Israel and Australia, according to data compiled by Bloomberg. Canada’s stock underperformance came, ironically, as its economy outpaced its Group of Seven peers with 4.5 percent growth in the second quarter.”

EWC has a trailing 12-month dividend yield of almost 1.7% and a three-year standard deviation of nearly 14.5%. The Canadian dollar is higher by 4.5% this year against the U.S. dollar.