The iShares Canadian Growth Index ETF (TSX:XCG) seeks exposure to large and mid-sized Canadian companies with earnings expected to grow at an above-average rate relative to the market. The fund has seen 1.09% growth in 2017 but has fallen 3.87% over a 3 month span dating back to early May.
Canadian markets experienced a swoon in the late spring and early summer as a number of factors created downward pressure. Stocks suffered from a slump in oil prices, the concern over the Ontario housing market and the crisis at Home Capital Group Inc., and the decision by the Bank of Canada to rise rates in the face of record consumer debt in Canada.
In July oil prices started to rebound and have hovered around the $50 mark in early August. Housing sales and prices dipped markedly since April in response to regulations and rising rates but there are signs that conditions are stabilizing. Home construction actually saw an uptick in June. Several positive economic reports from Statistics Canada, a GDP growth for May that beat expectations and several straight months of solid jobs numbers have boosted sentiment.
The iShares Canadian Growth Index ETF boasts a diversified option for investors who would like to own some of Canada’s fastest growing companies. After a dip in mid-2017 for Canadian stocks now might be a terrific time to jump in and ride what many expect to be a second half bounce back.
