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Canada's Economic Pillars
The Canadian stock market has a distinct character compared to global markets. Understanding our sector composition helps you build a portfolio that reflects—or diversifies beyond—the Canadian economy.
Dominant Sectors
Financial Services (~35% of TSX)
Canada's "Big Five" banks (RBC, TD, Scotiabank, BMO, CIBC) plus insurers and asset managers dominate the market. They're known for:
- Stable, growing dividends
- Oligopolistic market structure
- Well-regulated industry
- Sensitivity to interest rates and housing
Energy (~15% of TSX)
Oil and gas producers, pipelines, and energy services. Canada has significant oil sands reserves. The sector offers:
- High dividend yields (especially pipelines)
- Sensitivity to global commodity prices
- Transition questions around climate change
Materials (~10% of TSX)
Mining companies (gold, copper, base metals) and forestry. Canada is resource-rich, making this a significant market segment.
Industrials (~10% of TSX)
Railroads (CN, CP), engineering firms, and manufacturers. Canadian railroads are globally competitive and pay reliable dividends.
The Canadian Market's Quirks
⚠️ Important: Canada's stock market is heavily weighted toward financials and resources. We lack significant technology, healthcare, and consumer goods representation compared to the US market.
This concentration means Canadian-only investors miss out on major global growth sectors. It's why diversifying internationally matters.
Sector-Focused Investing
If you want exposure to specific sectors, consider sector ETFs:
- ZEB — Canadian bank ETF
- XEG — Canadian energy ETF
- XMA — Canadian materials ETF
- ZRE — Canadian REIT ETF
💡 Note: Most investors are better served by broad market ETFs rather than sector bets. The sectors you think will outperform often don't.
The Balanced Approach
For Canadian retirees, a combination of Canadian dividend-paying stocks (for tax efficiency and income) plus international exposure (for diversification and growth) typically makes the most sense.
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About Maple Wealth Guide
Maple Wealth Guide is an educational publication that explains investment concepts, retirement-related topics, and personal finance information for Canadians aged 50 and over. We are not licensed financial advisors and do not provide personalized recommendations. All content is for educational purposes only.
Non-Affiliation Statement: Maple Wealth Guide is not affiliated with any banks, brokerages, investment platforms, or government agencies.