Canadian ETFs Energized by Carney's Stand Against Trump
- Canada-focused ETFs have posted double-digit annual returns as the new PM takes office.
- JPMorgan's BBCA shows an over 16% yearly gain with $38 million in year-to-date inflows.
- A Canadian dollar ETF is seeing positive flows as tensions rise between the U.S. and Canada.
The election victory of Canadian Prime Minister Mark Carney, who declared Canada would "never yield" to U.S. pressure, according to CNN, coincides with strong performance from ETFs focused on Canadian markets despite growing economic challenges between the two nations.
As Canada-U.S. relations deteriorate under trade pressures, investors looking north have several ETF options showing resilience, with etf.com data suggesting money is moving toward both equity exposure and currency funds while Canada's new leadership charts an independent economic path.
BBCA Has Delivered Strong Returns
According to etf.com data, the JPMorgan BetaBuilders Canada ETF (BBCA) has delivered a more than 16 % return over the past year while charging a 0.19% expense ratio. The fund, which tracks large- and mid-cap Canadian equities, has attracted $38 million in year-to-date inflows.
BBCA's performance comes at a time when Carney has stated, "America wants our land, our resources, our water, our country," as reported by CNN. The fund holds Royal Bank of Canada as its top position at 7.7%, followed by Shopify Inc. (SHOP) at 5.3%, but uniquely includes Agnico Eagle Mines Limited (2.8%) in its top 10 holdings, per etf.com data.
Canadian ETFs Show Strength
While all three major Canadian equity ETFs share similar core holdings, they differ in both methodology and investor appeal. BBCA excludes small-caps but maintains $7.7 billion in assets with the highest year-to-date performance among its peers, etf.com data show.
The iShares MSCI Canada ETF (EWC) shares the same top holdings but includes Canadian Natural Resources Limited (2.8%) in its top 10, while excluding Agnico Eagle Mines. Despite its higher 0.5% expense ratio, EWC has attracted $74.9 million in year-to-date flows and maintains $2.7 billion in assets, etf.com reports.
The Franklin's FTSE Canada ETF (FLCA) offers the lowest expense ratio at just 0.09% with a portfolio composition similar to EWC. According to etf.com, FLCA uses an RIC-compliant index structure to avoid large stock concentrations but has experienced $7.5 million in year-to-date outflows despite posting the best one-year performance at 16.2%.
The Invesco CurrencyShares Canadian Dollar Trust (FXC) takes a different approach, offering pure currency exposure rather than equity holdings. FXC has gained 4.3% year to date and has seen $20.9 million in three-month inflows at a time when Carney is seeking to strengthen the Canadian economy independently from the U.S.
Source: etf.com Comparison Tool
Carney Takes on Economic Challenges
Carney has promised to "build things in this country again" while seeking stronger ties with European allies, CNN reports. The former central banker told podcast host Nate Erskine-Smith in October that he understands "how the world works" and knows "people who run some of the world's largest companies," positioning himself as someone who can navigate this economic challenge.
Each ETF showed positive one-month returns, with BBCA, EWC and FLCA all gaining about 4.4%, while FXC grew 3.7%, according to etf.com. These trends reflect investor interest in Canadian assets as Trump's tariffs of 25% on Canadian steel, aluminum, cars and car parts threaten to push the country toward recession, as CNN reports.
