Chart Review: Canadian Banks and Select Global ETFs

In this post let's take a look at the performance of the five large Canadian bank stocks and a select few ETFs using charts. This does not involve a deep technical analysis but just a simple review of these charts and making some observations.

1. Performance of five Canadian banks over the past 2 years:

click to enlarge

TD Bank (TD) and Royal Bank (RY) have been much better performers than the other three banks. Royal Bank is the most profitable bank in Canada. Hence it is not surprising to see Royal Bank leading the pack together with TD. Though TD has exposure to the US markets through a BankNorth (BNK) acquisition and the brokerage operation TD Ameritrade (AMTD), still TD Bank has weathered the current storm better than others. CIBC (CM) reported a huge loss last year due to their exposure to sub-prime assets. Hence CM is lagging the pack.

Related Article: Canadian banks cash in on new cachet

2. Comparison of iShares MSCI Canada ETF Vs. iShares MSCI Australia ETF:

The Canadian ETF (EWC) is well ahead of the Australian ETF (EWA). This comparison is interesting since these two countries share similar features such as developed western-style democracy, commodity-based economies, they are blessed with plenty of natural resources, etc. However from the performance above, one can infer that Australian banks and commodity producers were hurt much more than their Canadian peers since Australia is much closer to many Asian emerging markets like China, India, Malaysia, etc. and those countries have been hurt much more than the trading partners of Canada. It must be noted here that the largest trading partner of Canada is the US.

3. Comparison of iShares MSCI Malaysia ETF Vs. iShares MSCI Singapore ETF:

The iShares ETF for Malaysia (EWM) is doing better than the ETF for Singapore (EWS). This could be due to the fact that Singapore’s economy is affected more adversely by the global economy than the Malaysian economy. Besides, cargo shipping has fallen heavily since the recession. This has been a major drag for the Singapore economy since the port is a major hub between Asia and the developed world.

4. Comparison of iShares MSCI Chile ETF Vs. iShares MSCI Brazil ETF:

The ETF for Chile (ECH) is performing better than the ETF for Brazil (EWZ). The Chilean economy was more resilient to the global economic events than the Brazilian economy.

5. Comparison of iShares S&P Global Utilities ETF (JXI) Vs. iShares S&P Global Financials (IXG) ETF:

The above chart shows the difference in the performance of global financials and utilities. While the financial ETF fell as much as 80%, utilities held up relatively well. Hence, slow growing but high yielding utilities must be an integral part of a diversified portfolio.

Comments

[Delojozafado:]

I like RY and will like it a lot more in the shadow of the near term ex-div date of ~4/21. An interesting play on a likely beat down from it's near $31 US pe$o handle of late. We should see a little more than 50 cents knocked off in the ex period, likely more. Then we have the BOC and Mr. Carney coming to the "Q" party on 4/23. A little bit O' the nasty "Q" should knock down the pointy billed bird below .79 in perhaps even some over shoot. All that on the heels of the ex date should create a great buying opportunity in RY at an entry nearer to a +7.5% yield. Assuming (A of U & me not withstanding) that the pointy billed bird heads back to par over the next two years against the energy/commodity centric economy of Canada, the best managed economy, with the strongest banking system on earth, then we would eventually see a near 30% gain in our distributions against our cost basis. I would not go all in though until July and Sept have had their way on those that Fail to, "Sell in May and go away"!

Apr 06 11:12 AM