iShares MSCI Canada
One of the remarkable growth stories in the previous decade occurred in Canada, as the world’s thirst for crude oil benefited the North American exporting giant. Over the last few years, however, the emerging market slowdown and the eurozone credit crisis altered the trajectory for Canadian equities. Worse yet, Canadian dollar devaluation wreaked havoc on this unhedged tracker; SPY is up more than 40% to EWC 10% over the previous 24 months.
On the other hand, investors may be failing to consider how the battered Canadian dollar makes Canadian crude oil super cheap. The cheaper the crude, the more that Canadian companies will be able to export. Additionally, Bloomberg’s recent ranking of the world’s 10 strongest banks include four of Canada’s “Big 5.” All of those banks are in iShares MSCI Canada (EWC). Best of all, the top two sector weightings for EWC are energy and financials. Lastly, the Bank of Canada is keeping an eye on deflation, and may provide the same sort of stimulus that has been the lifeblood for U.S. and Japanese stock appreciation.