This ETF Presents a Buy-Low Opportunity

The iShares S&P TSX Called Composite Index Fund(TSX:XIC) gives investors the opportunity to mirror the ownership of the entire Canadian stock market. The index has experienced marginal declines in 2017 of 0.37% as of August 2. The index threatened to fall below the $15,000 mark in early July with headwinds from a swoon in oil, tightening rates, and a housing correction causing concerns for investors.

GDP numbers released Friday, July 28 revealed that the Canadian economy had grown 0.6% in May, beating expectations by 0.4%. The Index responded poorly dropping almost 1% at one point before rebounding for a smaller loss. The solid numbers increases the chances for a second rate hike from the Bank of Canada in October which may have spooked investors who are already concerned about over leveraged consumers in Canada.

Earnings have started to trickle in and fantastic results from Shopify Inc. and Air Canada have powered a rebound early this week. Several of Canada’s major banks are expected to release the next quarter of results for 2017. The Canadian dollar has also fallen below the $0.80 mark which will should ease concerns for Canadian manufacturers.

This ETF was priced at $24.15 as of August 2, 2017. The IMF expects Canada to continue this pace of growth until an expected down tick in 2018. Earnings coming in for major banks could bolster the index and should be aided by better lending margins.