Canadians, facing a trade war with their neighbor to the south, are circling the wagons and rallying around the maple leaf. This much is clear based on the flood of cash that has poured into Canadian exchange-traded funds (ETFs) in March. But the same could not be said for the iShares S&P / TSX 60, (TSE:XIU), which saw shares slide nearly 4% in Friday morning’s trading.
In March, Canadian investors put in $13.5 billion into various Canadian ETFs. This represented a new record. Interestingly, it also broke the previous record, which had been set just back in December, when Canadians piled into ETFs to the tune of $10.6 billion, reports noted. In fact, all asset classes—noted the National Bank—saw gains. Though of particular note were the funds that offered “…lower risk in the tariff era.”
Basically, the report noted, investors were “…digging positions for a trade war by sending assets overseas and seeking low-[volatility] exposures.” Fixed-income funds fared the best with an extra $6.3 billion, equity funds did almost as well with $5.9 billion, and rounding out most of the total were commodity funds, whose primary focus was on gold. Those saw $165 million coming in, the reports noted. United States ETFs did see traffic, but were lower than any other ETF category.
Less In General
This comes at a terrible time for Canada in general; while cash is flowing into Canadian ETFs, jobs are flowing, well, somewhere else. In fact, Canada—for the first time since 2022—posted a negative jobs report. Canada’s labor market lost 32,600 jobs for March, and the unemployment rate hit 6.7%.
But with this jobs report came the possibility of another rate cut at the Bank of Canada. Not surprising, either; while the Bank has been in inflation-fighting mode for some time now, the substantially-tightened liquidity of a bunch of job losses, coupled with many more terrified about the state of their own jobs, has at least partially done the bank’s job for it.
Is the iShares S&P / TSX 60 Index ETF a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:XIU shares based on 53 Buys, seven Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 12.9% rally in its share price over the past year, the average TSE:XIU price target of $43.90 per share implies 23.31% upside potential.
