FLCA: Warrants Broader Interest, But Wait For A Pullback
Franklin FTSE Canada ETF offers low-cost, large-cap Canadian equity exposure with a financials-heavy portfolio and no healthcare sector allocation. FLCA, which has a best-in-class expense structure, outperforms larger peers on risk-adjusted returns and yield, but suffers from wider bid-ask spreads and lower trading volumes. FLCA is exhibiting strong momentum, and Canadian banks' sturdy tier 1 capital ratios reflect well on higher payouts.
FLCA: Low Cost, But Macro Threat Is Present
The Franklin FTSE Canada ETF offers low-cost exposure to the Canadian stock market, with an expense ratio of just 0.09%. FLCA is heavily weighted toward financials, which may face challenges due to economic troubles and potential rate cuts by the Bank of Canada. Energy sector risks include dependency on US exports and falling crude prices, while IT exposure through Shopify is affected by US-China trade relations.
FLCA: Why I Prefer Canada Stock-Picking To This ETF
Franklin FTSE Canada ETF seeks to closely track the FTSE Canada RIC Capped Index. This is one of 3 ETFs that focus on Canadian equities, and all 3 have performed similarly. The global market is too pricey for me to look at this ETF to own currently. But its stock holdings represents a nice shopping list for stock picking.
