NEW YORK (
) -- When investors think of Canada, thoughts immediately turn to natural resources and that's always been logical. Basic commodities from the country include timber, base and precious metals, grains and energy. Canada has an abundance of all these.
The country has an educated population, great cities and a good basic infrastructure. Importantly one thing separating the country from the U.S. is a much more stable financial sector. In this, Canadian banks and other financial institutions avoided much of the financial mess incurred by other global banks including the U.S.
As a result the country's currency, "the Loonie" as it's affectionately called, has strengthened from its long-standing discount to the U.S. dollar. But, this has been a two-edged sword for Canadian exporters. Ask most Canadians about the currency and they beam with pride about its recent rally. It makes tourism to the south cheaper especially for snow birds heading south to Arizona and Florida. But manufacturers and exporters aren't keen on this event preferring a cheaper Loonie.
The Canadian stock market is getting deeper and within the country ETFs have grown. However, U.S. listed ETFs with a Canadian focus, beyond the single-country fund, have just recently begun to appear. Small-Caps and a few natural resource plays are in evidence but we have yet to see financials, and consumer sectors for example to appear. This will change in time and perhaps our list will continue to expand from a handful to a more comprehensive sector listing.
We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach.
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#5: iShares Canada Small Cap ETF
EWCS follows the MSCI Canada Small Cap Index which is designed to measure the performance of equity securities of small-capitalization companies, whose market capitalization, as calculated by the index provider, represents the bottom 14% of the Canadian securities market. Component companies include energy, financial and materials companies. The component companies may change over time.