Canadian Funds with the Highest Exposure to Shopify

Shopify SHOP stock, one of the most widely held companies in Canada, skyrocketed 21% on Tuesday following its third-quarter earnings report, and in the process giving a big boost to some mutual funds and exchange-traded funds with big holdings of the ecommerce firm’s shares.

Shopify stock rose C$26.89, closing at C$152.26, clocking the biggest intraday surge in over a year, fueled by better-than-expected revenue and a cheery forecast for the upcoming holiday shopping season.

Shopify is up more than 15% for the year to date, as of Nov. 12. The stock’s rally pushed the S&P/TSX Composite Index past the 25,000 mark for the first time, reaching a new record.

Leading Canadian ETFs with significant Shopify exposure surged alongside stock’s rally today. The iShares S&P/TSX Capped Info Tech ETF closed at C$67.05, up C$3.76, or 5.94%, while the iShares Canadian Growth ETF rose 2.52% to close at C$56.46. The BMO MSCI Canada ESG Leaders ETF ended the day up 1.72% at C$40.13.

“Third-quarter revenue strength was impressive, in our view, as Shopify continues to gather more merchants, expand internationally, succeed in offline sales, and drive overall gross merchandise volume expansion,” says Morningstar equity analyst Dan Romanoff, who forecasts the company is “well positioned as a leader in e-commerce and has a variety of irons in the fire to sustain durable growth.”

Shopify, which competes with ecommerce heavyweights such as Amazon (AMZN) and Walmart (WMT), has announced that it expects revenue growth for the current quarter to reach a mid- to high-twenties percentage. The guidance exceeds Wall Street’s projections of 22.8% revenue growth, estimated by FactSet.

The stock is one of the largest holdings in many Canadian stock ETFs and mutual funds. Here’s a look at the strategies with the heaviest weightings in Shopify stock.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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