Canada 🇨🇦 fund

[chang]

I see some ongoing conversations about the promise of gold miners (GDX), energy (XLE) and banks. A while ago I started buying FICDX in my TIRA. (Better to hold Canadian stuff in an IRA because taxes are not withheld if the fund is in a retirement account.)

Not going to make this long, but part of my thesis was that Canada has some very strong banks (RBC, BOM, TD) paying around 4% dividends, some strong oil companies (Suncor) and also gold miners (Barrick, a recent Buffett buy). Add to that the FX movement: the CAD has recently risen 10% after a long period of dropping by > 30%. (Going by memory - I don't have the numbers in front of me.)

I plan to continue adding on dips (assuming we get one). I guess this is not a popular idea because few people seem to mention Canadian equities.

[steadyeddy]

Not to be political but the new occupant of the White House is royally screwing the royal Canadians with the new fossil fuel policy

I do not know enough about the unique strengths of Canadian economy to take a single country bet. Good Luck.

[rhythmmethod]

chang , In addition to the industries you mentioned above there was a mention in Barron's yesterday on Canada's head start (no pun intended) in the pot industry. I also remember in the early days of M* a good deal of interest in Fidelity Canada fund. Is that the one you are adding? For me, I need to figure out where the diversification spreads my medium size port out too thin and where it's helpful. If it were me, I might take a flyer on a small position of an individual stock from Canada that showed promise to concentrate my effort.

[Deleted]

I have some money in Fidelity 529 for my kid in aggressive growth portfolio (which is collection of fidelity funds).

Interestingly portfolio is 43% international and only country specific fund in portfolio is Fidelity Canada fund at 2.5% weight.

[acksurf]

Feb 10, 2021 1:12:16 GMT chang said:

I see some ongoing conversations about the promise of gold miners (GDX), energy (XLE) and banks. A while ago I started buying FICDX in my TIRA. (Better to hold Canadian stuff in an IRA because taxes are not withheld if the fund is in a retirement account.)

Not going to make this long, but part of my thesis was that Canada has some very strong banks (RBC, BOM, TD) paying around 4% dividends, some strong oil companies (Suncor) and also gold miners (Barrick, a recent Buffett buy). Add to that the FX movement: the CAD has recently risen 10% after a long period of dropping by > 30%. (Going by memory - I don't have the numbers in front of me.)

I plan to continue adding on dips (assuming we get one). I guess this is not a popular idea because few people seem to mention Canadian equities.

I held this fund years ago.  It was one of Erryl's diversifiers if I recall correctly.  I just picked it up again after I sold some MATFX.

[chang]

I recall erryl was a fan of Canada and Canroys. The C$ has weakened relative to the US$ for two decades, though; a headwind for Canada funds held in US$. I am guessing this will change over the next 10 years.

[graust]

Mar 11, 2021 22:53:29 GMT chang said:

Check out the YTD chart. I'm seeing a trend. Time to add to this one, I think...?

I think the Canada trend is coinciding with the re-emergence of traditional value stocks (broad-brush terms—especially because these stocks got left behind—energy and financials). Canada is dominated by energy and financial names. So FICDX could be seen as a play on non-US (but likely US-correlated.....but isn’t everything anymore?) value stocks.

Not to take the thread off-topic, but could this be the time to add non-large growth EM funds (ie, not MATFX, KWEB or CQQQ? Such as the more blend or value type EM funds (maybe even broader indexes). Many emerging markets are resource-producing countries. Just a thought that occurred to me while reading this thread.

I also remember when erryl liked it....middle 2000’s maybe? He used it as an energy play then also (that was very early in the North American energy boom).

EDIT: I see this was discussed earlier. Apologies

[anovice]

Besides FIDCX, what are other mutual funds or ETFs that concentrate on the Canadian Market? I am thinking more specifically about financials.

[chang]

anovice - I think there are a few ETFs, but no other actively managed funds. I continue to hold FICDX in an IRA. I like the banking and energy / mining exposure. It has done fairly well, though I’m not sure if it’s a great diversifier (probably highly correlated to the S&P).

Normally I would keep foreign dividend payers in *taxable* in order to take credit for foreign taxes paid, but it’s worth mentioning that there is a US-Canada agreement in place so that Canadian assets held in US IRAs are exempt from tax withholding.

www.suredividend.com/canadian-taxes-us-investors/#retirementaccounts

"First of all, the 15% withholding tax that is normally imposed by the Canada Revenue Agency is waived when Canadian securities are held within U.S. retirement accounts. This is an important component of the U.S.-Canada tax treaty that was referenced earlier in this tax guide."

[anovice]

chang, thanks for your thoughts. While David Rosenberg has been off this year and tends to be a permabear, I like to listen to him.

www.youtube.com/watch?v=zpHqDbPWcbU

[retiredat48]

And canada will be helped by the climate change trend. Becoming more livable. Tundra becomes farmable...etc. There are now two seasons in Canada: winter, and road construction/repair!

r48

[bizman]

Jul 15, 2023 16:38:59 GMT retiredat48 said:

And canada will be helped by the climate change trend. Becoming more livable. Tundra becomes farmable...etc. There are now two seasons in Canada: winter, and road construction/repair!

r48

I'd say it's more winter and wildfire season lately.  We're choking on the smoke today in Iowa.  The wildfire smoke is an export they can keep as far as I'm concerned.

Edited to add:

Sorry for the digression, but the Canadians are looking to take advantage of our moronic immigration policies.  An open border in the south with no discernment, while talented H1B Visa applicants twist in the wind and are likely to head to Vancouver and Toronto to start their new companies.  If America didn't keep shooting itself in the foot, it would be a start.

Canada Woos American H-1B Visa Holders Fed Up with U.S. Immigration System - WSJ:

[chang]

The current FX rate of C$1 = US$0.76 is near its historical low point: link

(Click chart to enlarge.)



It appears to be heading up now (??). If the CAD is strengthening relative to the USD, that would seem (to me) to be a compelling reason to increase my investment in FICDX.

Also, it just crossed over its 50dma (thanks anovice for pointing this out), and the 200dma has been going straight up on a 2y view.

(Click charts to enlarge.)





To add more (in a fully invested IRA) I would need to sell something - LCG (FBGRX), Utils (FSUTX), Medical Equip (FSMEX), or Foreign Small Cap (FISMX). I recently added to FSUTX and FISMX, so I'd feel a bit stupid turning around and selling it.

Who's got a Magic 8-Ball here (richardsok , uncleharley , Norbert )? Any theories on whether the CAD is going to get stronger or weaker? Buy more FICDX?

[racqueteer]

I've always associated Canada with mining and oil. I guess the question is: How do you view the prospects for natural resources going forward? Oil is at least problematic with Russia pumping and selling like crazy. Otoh, maybe that's a case for buying NOW?

[uncleharley]

Canadas economy relies heavily on commodities. Agriculture, Lumber, as well as mining and oil. Based on that fact I would expect the Canadian $$ to strengthen on the global Forex market going forward. The same opinion would apply to Australia and New Zealand. JMHO.

The breakout last week and confirmation this week on the weekly chart for the CRB index tends to lend a bit of credibility to my opinion. 


stockcharts.com/h-sc/ui?s=$CRB&p=W&b=3&g=0&id=p32449845142&a=412434246&listNum=86

[chang]

The CAD/USD rate has been climbing steadily since March, after two previous bounces off $0.70. Zoom out to 2 or 5 years, and it looks like the CAD is showing upwards strength now.

www.xe.com/currencycharts/?from=CAD&to=USD

anovice have you bought/added to Can equity? I am still trying to decide whether to add to FICDX from other assets in my IRA.

[anovice]

Aug 1, 2023 6:08:56 GMT chang said:

The CAD/USD rate has been climbing steadily since March, after two previous bounces off $0.70. Zoom out to 2 or 5 years, and it looks like the CAD is showing upwards strength now.

www.xe.com/currencycharts/?from=CAD&to=USD

anovice have you bought/added to Can equity? I am still trying to decide whether to add to FICDX from other assets in my IRA.

@chang, indeed I did in a retirement account. I am light on internationals (still am) and needed large cap. For what it's worth, MFO has Fidelity Canada as a Great Owl Fund.

[chang]

The CAD has declined over the last year (link) and now stands at a 3Y low of 1.38 USD/CAD.

Yet, FICDX has done well: www.morningstar.com/funds/xnas/ficdx/quote

FICDX has beaten SPY over 3 years (my holding time). Though, in fairness, SPY has beaten FICDX over 1Y and 5Y.

My interest in FICDX was based on its overweight in Energy and exposure to strong Canadian banks.

Is it still a good holding for the future?  It does have a 0.89% ER which is a headwind compared to an S&P500 index fund. (It beats EWC over every time period, so the manager has earned his pay.)

[FD1000]

FICDX did better last year because value+energy have done better. In the last 10 years + YTD = 11, the SP500 was better in 9 out of 11 and several of these years by 10+%. See attachment