Coronavirus Beaten Down Stocks/Funds Series - iShares MSCI Canada ETF

Summary

• The iShares Canada fund is down 27% from its peak from early Feb. 2020, and near its 5 year low of USD 18.76 from 2015.
• Canada is mostly a services economy (70% of GDP), but exports (30% of GDP) are still the country's backbone, notably energy and mining.
• The iShares Canada fund is currently trading on a very low PE of 10.6 almost at 2009 GFC levels.
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This article first appeared on Trend Investing on April 8, 2020; therefore, all data is as of this date.

In this 'coronavirus beaten down stocks/funds' series of articles I look at both stocks and funds that have been beaten down due to the COVID-19 (coronavirus) market sell-off and are near or below their 5 year low, are very well valued, and have potential to rebound strongly as we recover.

Today I look at Canada, a market that has been heavily sold off towards a 5 year low, and trades on a PE ratio of just 10.6.

Canada

iShares MSCI Canada ETF (NYSEARCA:EWC) - Price = USD 22.26

As shown on the charts below the EWC fund is now back near its 5 year low or the 2015 low. The EWC fund is down 27% from its peak from early Feb. 2020.

iShares MSCI Canada ETF fund - 5 year price chart (in USD)

Source: Bloomberg

iShares MSCI Canada ETF fund - 25 year performance chart (in USD)

Source: iShares.com (Canada)

A 25 year oil price chart - Dips in 2008, 2015 and now

The chart below shows the oil price dips of 2008, 2015, and 2020. Note how these match up with the chart above for the Canada ETF.

Source

A 25 year chart comparing the TSX index [blue] with the US S&P 500 [green]

The chart below shows that the TSX and S&P 500 ran parallel from 1995 to 2012. From 2012 to 2020 the US S&P 500 moved significantly ahead mostly due to the US tech boom doing well, and the Canadian mining based economy battling along.

Source: Yahoo Finance

A look at what drives the Canadian economy

According to Wikipedia:

(Canada) is the 10th largest GDP by nominal and 16th largest GDP by PPP (Purchasing Power

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information in this article is general in nature and should not be relied upon as personal financial advice.