Fortify Canadian allocations with these industrial and defense holdings in one ETF
Jun. 16, 2025
The Canadian federal government has announced plans to ramp up spending on defense, as well as domestic industrial programs related to infrastructure and security. In particular, Prime Minister Mark Carney said Ottawa will significantly boost its defense spending to hit a NATO target of 2% of Gross Domestic Product (GDP) years earlier than planned.
More broadly, with trade tensions between Canada and the United States simmering, there are market expectations for potential stimulus expenditure from federal and provincial governments that could favour domestic companies.
Fund in focus
Key takeaways
- Canadian federal spending on domestic industrial and defense production is expected to increase
- ZIN provides exposure to related domestic stocks in industrial, infrastructure and military output
- ZIN is equal weighted to lessen security-specific risk
In a May 9 speech, the PM announced higher spending was required to ward off the “multiplying” threats from hostile governments, terrorism and cyber attacks. He also conceded that Canada was “too reliant” on the United States for defense, adding that Washington was “reducing its relative contribution to our collective security.”1
The new Liberal government, which won a minority in April, is promising to run deeper deficits to invest in infrastructure and reduce the country’s dependence on the U.S.2
Carney is promising fast approvals and public financing for a range of projects that could benefit domestic industrials, including infrastructure, components and management systems for critical mineral corridors, ports, nuclear projects and pipelines. Such investments are needed, the PM said in last month’s Throne Speech, to boost the domestic economy and allow for greater trade with other nations beyond the United States.
With that in mind, ZIN’s equal-weight exposures to Canadian blue-chip industrial and defense stocks can provide portfolios with domestic allocations that may potentially benefit from increased government spending in those areas.
Top industrial
Name |
Weighting |
AtkinsRéalis Group Inc |
3.22% |
Hammond Power Solutions Inc |
3.09% |
Finning International Inc |
3.01% |
Combined weight |
9.32% |
Top defense
Name |
Weighting |
Bombardier Inc |
2.98% |
Cargojet Inc |
2.51% |
CAE Inc |
2.43% |
Combined weight |
7.92% |
Equal weight benefits
ZIN holds a relatively equal position in 39 domestic equities. By allocating equal weight to each position in the ETF, they provide a more balanced exposure across various sectors and company sizes, potentially mitigating concentration risk associated with large-cap dominance.
Equal-weight ETFs can provide a more balanced exposure to all components of the underlying index. This means each stock, regardless of size, contributes equally to the ETF’s performance. It reduces the risk of being heavily concentrated in a few large-cap stocks, which can be volatile.
Performance (%)
Year-to-date |
1-month |
3-month |
6-month |
1-year |
3-year |
5-year |
10-year |
Since inception |
|
-1.09 |
12.51 |
6.24 |
-3.81 |
12.09 |
11.50 |
15.02 |
9.08 |
10.64 |
Bloomberg, as of May 31, 2025. Inception date for ZIN = November 14, 2012.
1 “Canada pledges to meet NATO’s 2% defense spending target within a year,” BBC News, June 9, 2025.
2 “Carney to run deeper deficits to fund infrastructure, tax cut plans,” Bloomberg, April 19, 2025.
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