Canada’s growth has slowed in 2019, but the broader economy has remained healthy as we look ahead to the New Year.
Domestic and global markets were rattled in late 2018, but the TSX and its peers in the developed world have bounced back nicely. However, there are storm clouds on the horizon on the home front.
The Bank of Canada has warned of the growing pains of Canada’s transition to a green economy. In the near term, oil and wheat shipments are expected to take a hit due to the Canadian National Railway (TSX:CNR) strike that is underway. This means investors in Canada’s markets may be in for a tumultuous 2020, especially as growth was expected to slow down anyway.
Investors can seek to diversify on a global scale with the iShares Core MSCI All Country World ex Canada Index ETF (TSX:XAW). Shares of this ETF have climbed 17% in 2019 as of close on November 22.
It has posted positive returns in every year except 2018, when it posted a meagre 2% decline. Geographically, it boasts a nearly 60% weighting in the Untied States. This is followed by an 8% weighing in Japan, a 5% weighting in the United Kingdom, and a 3% weighting in China and France.
A dip into global markets is a prudent strategy as Canada looks to hit rough waters. That is why investors should consider this ETF in the late fall.
