EWC ETF

EWC's high exposure to financials and low exposure to technology dampens its growth outlook compared to the S&P 500. Canada's weak economy and high household debt limit growth prospects for EWC's financial sector-heavy portfolio. Despite a fair valuation, EWC's earnings growth forecast is inferior to the S&P 500 due to low tech sector exposure.

Has the Bank of Canada beaten inflation? Not completely.

Canadian equities have underperformed US stocks in 2024, and I expect that to continue. The theme for 2024 has been AI - and EWC is an ETF that is not well positioned to capitalize on that theme. The Bank of Canada has begun cutting interest rates. This is a significant headwind for the fund's largest sector, which is Financials.

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Investing in Canada's stock market offers diversification and exposure to robust sectors like natural resources, energy, and mining. Canada's stable political climate, regulatory environment, and banking system add security to investments. iShares MSCI Canada ETF is a good fund for diversifying portfolios and offers targeted exposure to Canadian equities.

The rising popularity of active and fixed income ETFs.

The article evaluates the iShares MSCI Canada ETF as an investment option focused on Canadian equities. Canada underperformed the US in 2023, opening up some value plays in relative terms. This is especially true for top-heavy sectors like Energy and Financials. Population growth and lower interest rates all support Canadian economic growth and higher equity prices.

iShares MSCI Canada ETF is concentrated in the financial sector, with the top 10 holdings comprising 42% of the fund. EWC is dominated by the financial and energy sectors, providing a diversification opportunity for investors looking to move away from the tech industry. I rate the Fund a Buy relative to the S&P 500 Index. It represents an intriguing diversifier at a time when value sectors are showing signs of a comeback.

Oil prices have surged lately due to prolonged output cut possibilities by Saudi Arabia and Russia.