Canadian elections could herald new investment direction

A seismic shift in the federal elections in Canada overnight could herald a significant shift in the investment environment in Canada as the country has moved left of centre after a decade of right of centre led politics.

Canada is the focus of some of Europe’s oldest collective investments, such as the UK listed Foreign & Colonial Investment Trust, which launched in 1868, and which has some 44% exposure to North American assets in its holdings today.

Justin Trudeau, scion of maverick 1970s Canadian prime minister Pierre Trudeau, is now set to lead a new Liberal Party government in Ottawa.

He campaigned on an anti-austerity platform to counter encumbent Conservative Party prime minister Stephen Harper, but in key sectors has sought to clearly distance himself from ongoing government policy, particularly with reference to the Keystone XL project to ship hydrocarbons via a new pipeline to the US market and refineries. Keystone has been blocked on the US side by the Obama administration, and Trudeau has made much of needing to ‘reboot’ Canada’s relationship with its biggest trading partner and ally.

His message clearly echoed with voters, as his party gained over 47% more seats than during the last election.

Data from FE identifies some 710 funds with over 10% exposure to Canada

Over three years, the top performer was an IT sector focused ETF, but there are also other growth and small cap focused funds that have performed well over the period.

However, the impact on both Canada’s overall economy and asset classes linked to commodities have taken a hit.

For example, leveraged ETFs investing in gold mining companies have suffered, along with those invested in precious metals more broadly, but also those focused on exploration as much as extraction.

Top performers 3-years

Funds 1m 3m 6m 1yr 3yr 5yr 10yr
iShares S&P/TSX Capped Information Technology Index TR in EU -1.20 -5.51 -12.42 41.19 151.44
National Trust Company Economic Investment Trust Limited TR in EU -21.57 -27.58 1.97 30.89 119.69 113.87 83.09
TANAKA Growth R TR in EU -0.43 -11.15 -5.57 33.67 108.67 125.19 85.20
Oberweis International Opportunities TR in EU 1.74 -7.69 -3.94 29.17 97.90 146.22
Suncorp Optimum Professional Savings Lazard Global Small Cap in EU -0.28 -5.42 -9.50 29.65 89.37

Bottom performers 3-years

Customise Columns 1m 3m 6m 1yr 3yr 5yr 10yr
Direxion Daily Gold Miners Index Bull 3X Shares TR in EU 32.67 -14.16 -62.00 -73.86 -99.32
Direxion Daily Gold Miners Bull 3x Shares TR in EU 18.43 16.65 -94.08
ProShares Precious Metals UltraSector ProFund Investor TR in EU 22.09 -11.98 -41.16 -42.69 -80.67 -83.60 -79.60
Market Vectors Junior Gold Miners ETF TR in EU 2.99 -2.30 -16.66 -24.30 -72.59 -76.42
Ahead Oak Tree Junior Mining & Exploration R in EU 4.42 -14.80 -26.09 -23.07 -71.61 -79.85 -64.58

Source: FE, rebased in euros

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