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iShares MSCI Canada ETF

EWC:NYSEArca

equity ETF | passive | iShares (BlackRock) | Tracks MSCI

Market Price
US$56.35 (28 Jan 2026)
+33.90% (YoY)
NAV
US$56.17
+0.31% Premium
Yield
1.45%
-32.18% (YoY)
Expense Ratio
0.50%
+67% vs Avg: 0.30%
Making Headlines

⚡ Executive Summary

📊 The Bottom Line

This ETF offers broad exposure to large- and mid-capitalization Canadian equities, tracking the MSCI Canada Custom Capped Index. With a 30-year history and significant liquidity, it provides a direct and efficient way to access the Canadian market. A potential bull case sees NAV reaching US$67.62 (+20%) driven by commodity strength, while a bear case could see NAV at US$45.08 (-20%) if global growth falters.

⚖️ Risk vs Reward

The underlying Canadian equity market, heavily weighted towards financials, energy, and materials, currently trades at a P/E of 22.87x, which is above its 5-year average but below peak valuations. This positions it as fairly valued, offering a balance of growth and income, but susceptible to commodity price volatility and global economic shifts. Compared to the broader U.S. market, Canadian equities may offer diversification benefits, though at the cost of higher concentration in cyclical sectors. The 0.31% premium/discount to NAV indicates efficient market pricing.

🚀 Why EWC Could Soar

  • • Strong global demand for commodities (oil, metals) could significantly boost the Energy and Basic Materials sectors, which comprise over 30% of EWC's holdings, driving earnings and valuations higher.
  • • A strengthening Canadian dollar could enhance returns for U.S. investors in EWC, as local currency gains translate to higher USD-denominated NAV.
  • • Increased investor rotation into international developed markets, especially those with attractive dividend yields, could fuel inflows into Canadian equities.

⚠️ What Could Go Wrong

  • • A downturn in global economic growth could depress commodity prices, significantly impacting the heavily weighted Energy and Materials sectors in Canada.
  • • High concentration in the Financials sector (over 36% of holdings) exposes the ETF to risks from potential interest rate hikes, a cooling housing market, or increased loan defaults in Canada.
  • • A weakening Canadian dollar relative to the U.S. dollar would erode returns for U.S. investors, even if underlying Canadian equities perform well in local currency terms.

🏢 Fund Overview

What Are You Actually Buying

  • The Canadian equity market is characterized by a high concentration in Financial Services, Energy, and Basic Materials sectors, reflecting the nation's robust banking system and abundant natural resources.
  • Canadian companies, particularly those in banking and energy, are often large-cap and offer attractive dividend yields, making them a popular choice for income-focused investors.
  • The market's performance is closely tied to global commodity cycles and interest rate environments, providing a distinct risk-reward profile compared to more growth-oriented markets.
  • The MSCI Canada Custom Capped Index aims to capture the large- and mid-cap segments of the Canadian market while applying capping constraints to prevent over-concentration in any single issuer.

Market Dynamics & Outlook

  • The Canadian economy is currently navigating a period of moderating inflation and potential interest rate stabilization, influencing the outlook for its interest-rate sensitive financial sector.
  • Global energy and materials demand, driven by industrial activity and geopolitical factors, remains a key determinant for a significant portion of the Canadian market's performance.
  • The housing market in Canada and consumer debt levels are closely watched, as they directly impact the health and lending activities of the dominant financial institutions.
  • While traditional sectors remain strong, there's growing, albeit smaller, innovation in technology and diversified industries contributing to Canada's economic fabric.

🎯 Why This Matters

Understanding the Canadian market's unique sectoral composition and its sensitivity to global commodity prices and domestic interest rates is crucial for investors. EWC provides targeted exposure to these dynamics, making it an important tool for portfolio diversification or expressing a specific country view on Canada's economic trajectory.

📈 Valuation & Analysis

Historical Performance

YTD
+36.03%
1Y
+36.03%
Yearly Growth (3Y)
+20.51%
Yearly Growth (5Y)
+14.12%
Yearly Growth (10Y)
+12.00%
Yearly Growth (Since Inception)
+8.83%

Current Valuation

The iShares MSCI Canada ETF (EWC) currently reflects a market-cap weighted P/E ratio of 22.87x and a P/B ratio of 2.63x for its underlying holdings. This valuation is slightly above the fund's 5-year average P/E, indicating a moderate premium, but it is below historical peaks seen in some developed markets. The ETF's current TTM dividend yield stands at 1.45%, which is competitive within its asset class, especially considering the income orientation of many Canadian financial institutions. This suggests that the market is pricing in steady, but not aggressive, earnings growth for Canadian large and mid-cap companies.

The Bull Case - Upside to

Robust Commodity Price Environment

Medium Probability

Sustained high oil, gas, and precious metal prices could drive a 25-30% increase in earnings for EWC's energy and materials holdings, potentially adding 10-15% to the ETF's NAV over 12-18 months. This translates to an NAV target of US$64.58 - US$67.62.

Strong Canadian Banking Sector Performance

High Probability

Continued economic stability and prudent lending by Canadian banks, combined with favorable interest rate spreads, could lead to 8-10% earnings growth for the financial sector, contributing 3-5% to overall NAV. This supports the upper range of the NAV target.

Attractive Dividend Yields Drive Inflows

Medium Probability

EWC's competitive dividend yield (currently 1.45%) could attract income-seeking investors, leading to increased demand and potentially a slight premium to NAV, adding 2-3% to returns beyond fundamental growth.

The Bear Case - Downside to

Global Economic Slowdown Impacts Commodities

Medium Probability

A significant global recession could cause a 20-30% decline in commodity prices, reducing earnings for EWC's energy and materials holdings by 15-20% and potentially pulling the ETF's NAV down by 8-12%. This implies an NAV target of US$49.66 - US$51.56.

Canadian Housing Market Correction

Medium Probability

A severe correction in the Canadian housing market could trigger a rise in loan defaults and pressure on bank profits, impacting the heavily weighted financial sector's earnings by 10-15%, leading to a 4-6% decline in EWC's NAV.

Persistent CAD Weakness Against USD

High Probability

If the Canadian dollar continues to weaken against the U.S. dollar, U.S. investors in EWC could see returns eroded by an additional 5-7% over a year, independent of underlying stock performance.

Risk/Reward Assessment

The risk-reward profile for EWC is balanced, leaning slightly towards the upside given the current macro environment and the strong performance of Canadian equities over the past year. The bull case is primarily driven by the cyclical strength of commodities and the stability of the Canadian financial system, which could deliver returns in the 10-20% range. However, significant headwinds, particularly a global economic downturn impacting commodity demand or a pronounced correction in the Canadian housing market, could trigger downside risks of 10-20%. The ETF's high concentration in a few key sectors means investors must be comfortable with the specific cyclical exposures of the Canadian economy. While the 1.45% yield provides some income buffer, the potential for currency fluctuations for U.S. investors remains a material consideration, highlighting the need for a diversified approach to international allocations.

Peer Comparison

• EWC offers established, broad-based exposure to large- and mid-cap Canadian equities with a long track record since 1996, providing reliable access to the market. • Its expense ratio of 0.50% is higher than some newer, lower-cost competitors but is in line with or below many international developed market ETFs. • The ETF boasts high liquidity with an average daily dollar volume of over US$112 million, ensuring efficient entry and exit points for investors. • While performance has been strong, it generally aligns with its benchmark, indicating effective tracking but not necessarily outperformance.
FundExpense RatioAUM (B)1Y Return3Y Return5Y ReturnYield
iShares MSCI Canada ETF (EWC) ⭐50.00%US$4.1B36.03%20.51%14.12%1.45%
JPMorgan BetaBuilders Canada ETF (BBCA)19.00%US$9.8B31.62%17.00%14.48%1.78%
Franklin FTSE Canada ETF (FLCA)9.00%US$0.6B31.62%17.56%15.63%1.80%

🎯 Why This Matters

EWC's valuation and performance analysis underscore its role as a core allocation to Canadian equities. The concentration in cyclical sectors drives its performance, and understanding these dynamics is key to anticipating its movements. While its expense ratio is higher than some pure-play index funds, its liquidity and deep history remain attractive for investors seeking reliable Canadian market access.

📱 Social Sentiment

45%
Bullish
Bullish: 45%
Neutral: 40%
Bearish: 15%
Trend: Stable

What's Driving Sentiment

CAUTIOUS_BULLISH

Social sentiment around Canadian equities and EWC is currently cautiously bullish, driven by the strong performance over the past year but tempered by concerns over global economic stability and sector concentration. Discussions on Seeking Alpha highlight the attractive dividend yields and perceived undervaluation relative to US markets, particularly in the financial sector. On X/Twitter, FinTwit accounts debate the longevity of the commodity supercycle and its impact on Canadian energy and materials stocks. Reddit communities, especially r/Bogleheads, view EWC as a solid long-term diversification tool within a global portfolio, while MooMoo and LinkedIn discussions reflect more active trading perspectives and institutional allocation trends, respectively. The prevailing mood is one of watchful optimism, acknowledging recent gains while closely monitoring macroeconomic indicators.

📊 Analyst & Expert Themes

CAUTIOUS BULLISH
•

Analysts emphasize Canada's role as a commodity exporter and the sensitivity of its market to global growth cycles.

•

Expert commentary highlights the robust nature of Canadian banks and their attractive dividend yields, a key draw for long-term investors.

•

Research suggests that while Canadian equities offer diversification, their concentration in a few sectors requires active monitoring of macro trends.

•

Key voices point to currency fluctuations as a significant, often overlooked, factor impacting returns for foreign investors.

Platform Breakdown

Seeking Alpha30% weight
50%
35%
Bullish: 50%Neutral: 35%Bearish: 15%
Key Themes
  • • Attractive dividend yields from Canadian banks
  • • Potential for commodity price strength to continue
  • • Diversification benefits from U.S. market concentration
X (Twitter/FinTwit)25% weight
40%
45%
Bullish: 40%Neutral: 45%Bearish: 15%
Key Themes
  • • Debate on sustainability of commodity prices
  • • Impact of Bank of Canada monetary policy
  • • Comparative performance against other developed markets
Sentiment can be highly reactive to daily news and economic data releases.
Reddit20% weight
55%
30%
Bullish: 55%Neutral: 30%Bearish: 15%
Key Themes
  • • Long-term hold for geographic diversification
  • • Consideration within three-fund portfolio strategies
  • • Value vs. growth debate in Canadian equities
Discussions may overemphasize passive investing principles without deep market analysis.
MooMoo15% weight
35%
50%
Bullish: 35%Neutral: 50%Bearish: 15%
Key Themes
  • • Technical analysis of EWC's price action
  • • Short-term trading opportunities in Canadian stocks
  • • Comparison with other country-specific ETFs
Platform's user base often focuses on short-term trading signals and technical indicators.
LinkedIn10% weight
45%
45%
Bullish: 45%Neutral: 45%Bearish: 10%
Key Themes
  • • Institutional asset allocation to Canada
  • • Macroeconomic outlook for Canadian sectors
  • • Implications of global trade policies on Canadian exports
Professional sentiment tends to be more conservative and focused on long-term trends and risk management.

Positive Catalysts

  • • Sustained recovery in global economic growth driving demand for Canadian raw materials and energy.
  • • Further stabilization or decline in interest rates, benefiting Canadian banks and the broader economy.
  • • Increased capital flows into developed international markets, diverting from potentially overvalued U.S. equities.

Negative Catalysts

  • • A sharp and prolonged decline in global commodity prices due to reduced demand or oversupply.
  • • Significant downturn in the Canadian housing market leading to financial sector instability.
  • • Continued strength of the U.S. dollar, eroding returns for U.S.-based investors.

📊 Appendix

Top 10 Holdings (80+ of ETF Value)

#TickerLogoNameSectorWeight
1RY
R
Royal Bank of CanadaFinancials8.1%
2TD
T
The Toronto-Dominion BankFinancials5.7%
3SHOP
S
Shopify Inc. Class AInformation Technology5.7%
4AEM
A
Agnico Eagle Mines LtdMaterials3.7%
5ENB
E
Enbridge IncEnergy3.5%
6BMO
B
Bank of MontrealFinancials3.4%
7BNS
T
The Bank of Nova ScotiaFinancials3.2%
8BN
B
Brookfield Corp Class AFinancials3.2%
9ABX
B
Barrick Mining CorpMaterials3.0%
10CM
C
Canadian Imperial Bank of CommerceFinancials3.0%

Fund Mechanics

How It Works

The iShares MSCI Canada ETF (EWC) is a passively managed exchange-traded fund designed to track the investment results of the MSCI Canada Custom Capped Index. This index aims to represent the performance of large- and mid-capitalization companies within the Canadian equity market. The 'Custom Capped' aspect means the index applies certain constraints to limit the weight of individual securities or groups of affiliated companies, preventing over-concentration and ensuring diversification within the mandate. EWC employs a representative sampling strategy, meaning it invests in a portfolio of securities that collectively have investment characteristics similar to those of the index, rather than holding every single component. This approach helps manage transaction costs and allows the fund to closely approximate the index's performance.

Holdings Breakdown

Number of Holdings
84
Top 10 Concentration
4244.0%
Top 20 Concentration
5545.0%
Turnover Rate
400%
CategoryWeightDescription
Financials36.7%Includes major Canadian banks, insurance companies, and diversified financial services.
Materials18.3%Comprises mining companies (gold, silver, copper) and other basic resources.
Energy14.0%Oil and gas producers, pipelines, and energy services.
Information Technology9.4%Software, IT services, and technology hardware.
Industrials9.1%Transportation, machinery, and construction materials.
Consumer Staples3.6%Food & beverage, household products, and retail staples.
Consumer Discretionary3.1%Retailers, automotive, and consumer services.
Utilities2.4%Electric, gas, and multi-utilities.
Other2.2%Includes sectors with smaller allocations or unclassified holdings.
Communication Services0.8%Telecommunication services and media.
Cash and/or Derivatives0.3%Cash holdings and derivative instruments for liquidity and indexing.
Real Estate0.2%Real estate companies and REITs.

Cost Efficiency

Expense Ratio
0.50%
Median Bid-Ask Spread
0.060%
Metric1 Year3 Year5 Year
Tracking Error0.05%0.07%0.08%
Tracking Difference-0.52%-0.31%-0.22%
Expense Ratio History
YearExpense Ratio
20250.50%
20240.50%
20230.50%

Performance History

YearETF ReturnBenchmark ReturnTracking DiffVolatilityMax DrawdownSharpe Ratio
202536.03%36.55%-0.52%14.51%-12.00%2.48
202412.25%11.89%0.36%15.00%-8.00%0.81
202314.62%15.44%-0.82%16.00%-10.50%0.91
2022-12.77%-12.80%0.03%18.00%-20.00%-0.71
202126.74%27.06%-0.32%16.00%-7.00%1.67
Annualized Return Since Inception
8.83%

Detailed Peer Comparison

TickerNameIssuerExp RatioAUM (B)1Y3Y5YYieldStdDev 3YSharpe 3YSpread
EWC ⭐iShares MSCI Canada ETFiShares (BlackRock)0.50%US$4.1B36.0%20.5%14.1%0.01%14.51%0.920.060%
BBCAJPMorgan BetaBuilders Canada ETFJPMorgan0.19%US$9.8B31.6%17.0%14.5%0.02%13.80%0.950.040%
FLCAFranklin FTSE Canada ETFFranklin Templeton0.09%US$0.6B31.6%17.6%15.6%0.02%13.90%0.980.080%
Category Average0.30%—33.1%18.4%14.7%0.02%—0.95—

Risk Metrics

Beta
0.92
R-Squared
0.98

Standard Deviation

1 Year3 Years5 Years10 Years
15.50%14.51%14.20%13.00%

Sharpe Ratio

1Y3Y5Y10Y
2.200.920.900.95

Sortino Ratio

3 Years5 Years
1.501.45

Maximum Drawdown

1 Year3 Years5 YearsSince Inception
-12.00%-20.00%-25.00%-56.67%
Upside Capture
10500.0%
Downside Capture
9500.0%

Correlations

S&P 500
0.85
Aggregate Bond
0.20
MSCI ACWI
0.90
Gold
0.40

Liquidity & Trading

Volume

Avg Daily Shares
2,005,223
Avg Daily Dollar Volume
US$113.0M
Trend
stable

Bid-Ask Spread

MetricValue
Median (Percent)0.060%
Median (Dollar)US$0.03
During Hours0.050%
At Close0.070%
Volatilitylow

Premium/Discount to NAV

MetricValue
Current0.31%
30-Day Average0.25%
1-Year Average0.15%
Standard Deviation0.10%
Max Premium (1Y)0.75%
Max Discount (1Y)-0.50%

Creation/Redemption Activity

Avg Daily Units
500,000
Trend
increasing
Net Flows
PeriodNet Flow
1 MonthUS$0.0M
1 QuarterUS$0.0M
1 YearUS$0.0M

⚠️ Disclaimer: This ETF research report is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell securities. EC² Invest is not a registered investment advisor. All data is sourced from public sources and may contain errors. Past performance does not guarantee future results. ETF investing involves risk, including possible loss of principal. Always conduct your own research and consult with a qualified financial professional before making investment decisions.