In its recent forecast the International Monetary Fund projected that Canada would continue to lead the G7 in GDP growth in 2018. This is after a surprising 2017 that has brought about stunning growth for Canada in a year when most were expecting weaker numbers. Flat numbers in July snapped an 8-month streak of positive growth.
Investors can capitalize off of this trend with the iShares S&P/TSX Capped Composite Index Fund (TSX:XIC). The ETF has increased 2.93% in 2017 as of close on October 12 and boasts a low 0.05% fee. After a slump in the summer the TSX index has stormed back in September after strong Canadian bank earnings and another vote of confidence following a rate hike from the Bank of Canada turned around investor sentiment.
Canada has seemingly weathered the 2017 storm that included a major housing correction and the constant worry that higher interest rates would crunch the record high debt-to-income held by citizens. These concerns will no doubt continue into 2018, but the Bank of Canada also seems willing to take a more cautious approach as it nears the next rate decision on October 25.
The IMF forecast suggests that Canada will continue to impress in 2018. Canadian banks continue to post record profits and recreational cannabis legalization should power the hottest stocks on the index. The ETF has climbed 8% year-over-year but it still comes in at a nice value.