Investors need reminding that North America extends beyond the US. Canada, often overlooked but certainly not a laggard, is projected to be the fastest-growing economy in the G7 in 2025 and stands as a beacon of stability on the global stage in an era of uncertainty. This strength is rooted in its historic banking system, which has not missed a single dividend for 200 years – a feat unmatched by its counterparts in the US or the UK.
Ultimately, the most critical factor in long-term investment performance is the price paid for assets. From this perspective, Canadian stocks present a compelling opportunity, with the country’s exchange trading at its deepest discount to the US market in history. The market’s performance has already begun to broaden: the Canadian S&P/TSX Composite Equal Weight Index has outpaced the S&P 500 Equal Weight Index in 2024, gaining 17.8% compared with 12.3%.
At Canadian General Investments (CGI), North America’s second-oldest investment trust, we adhere to a disciplined buy-and-hold strategy. Our focus is on high-quality Canadian companies with US exposure limited to 25% of the portfolio. CGI offers a cost-effective gateway to Canadian stocks, which remain underappreciated despite Canada’s financial stability, vast natural resources and strong ties to the world’s largest economy.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
How to invest in Canada
Industrials have benefited from increased infrastructure spending in the US, driven by trends such as nearshoring, electrification and decarbonisation. One standout in our portfolio is Stantec (Toronto: STN), a global leader in sustainable design and engineering. Stantec’s focus on operational efficiency and project execution has led to industry-leading margins, with strong growth prospects fuelled by public and private investments, particularly from US initiatives such as the Infrastructure Investment and Jobs Act.
While Canada’s economy is often associated with “old world” sectors like energy and banking, the country also boasts a rich technological legacy. From BlackBerry to Shopify, Canadian innovators have reshaped their respective markets. One standout example is Descartes Systems Group (Toronto: DSG), a global leader in software-as-a-service (SaaS) solutions designed to enhance the efficiency, security and sustainability of logistics-heavy businesses.
Descartes serves more than 26,000 customers worldwide, including major corporations such as Coca-Cola, Home Depot and Mondelez International, helping them streamline supply chains. With a history of 28 successful acquisitions since 2016, totalling US$1.1 billion, Descartes is well-positioned for continued growth. Its financial strength allows it to seek out undervalued assets patiently, ensuring strategic expansion while maintaining profitability.
Fuelling a nuclear renaissance
The 2011 Fukushima disaster led to a dramatic decline in uranium prices. But today the drive to cut carbon emissions has reignited interest in nuclear power. Demand for uranium is outstripping supply, and Canada, home to some of the world’s richest deposits, is uniquely positioned to capitalise on this trend.
CGI has established positions in both Cameco (Toronto: CCO), the largest publicly traded, uranium-related company in the world, and in the lesser-known NexGen Energy (Toronto: NXE). NexGen’s Rook I project, the largest development-stage uranium mine in Canada, is expected to begin production by 2029, potentially delivering up to 30 million pounds of uranium annually.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
-
David Ellison: America's new media mogulDavid Ellison is building a mighty new force in old and new media. Critics worry that he will prove to be a Trumpian patsy. Is that fair?
-
Investors have overlooked some of China’s best growth stocksOpinion Dale Nicholls, portfolio manager, Fidelity China Special Situations, highlights three Chinese businesses where he’d put his money
-
Global investors have overlooked some of China’s best growth stocks
Opinion Dale Nicholls, portfolio manager, Fidelity China Special Situations, highlights three Chinese businesses where he’d put his money
-
How Next defied the odds and positioned itself as a British high-street stapleNext rose from a near-death experience and now thrives as a high-street staple. What's driving its success – and should you invest in the retailer?
-
Alok Sama on AI and how to invest in the future of technologyInterview Alok Sama, the former president and chief financial officer of Masayoshi Son’s investment vehicle SoftBank Group International, explains AI’s potential
-
Why investors should avoid market monomaniaOpinion Today’s overwhelming focus on US markets leaves investors guessing about opportunities and risks elsewhere
-
Global investors have overlooked the top innovators in emerging marketsOpinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
-
Pinewood Technologies: a drive for growthPinewood Technologies’ platform is one of the best in the business. Investors should buy in
-
'EV maker Faraday Future will crash'Faraday Future Intelligent Electric is failing dismally to live up to its name, says Matthew Partridge
-
Investors should cheer the coming nuclear summerThe US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
