Hi there,
This is a personal decision that only you can answer and is highly dependent on your risk tolerance. That being said, an interesting phenomenon is currently happening. Since ECA is moving to the US, Canadian funds that track the Index are being forced to sell the stock. This has resulted in downward pressure.
On the flip side, U.S. index funds will begin to add ECA over the next couple of months. It has yet to be known which funds, but regardless, the expectation is that this should result in buying pressure. Below is a exert from a recent G&M article that explains this more eloquantly.
Of note, I am long ECA myself and intend on holding through this transition. Granted, I have a high risk tolerance and do not need the cash immediately. Once again, this is a personal decision based on your own individual financial situation, goals, risk tolerance, etc.
Mat
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"...Canadian funds that track the country's stock indexes will be selling, while their U.S. counterparts won't need to rush to buy the new Ovintiv stock.
Randy Ollenberger of BMO Nesbitt Burns Inc. said he expects anywhere from 90 million to 120 million of Encana's shares, out of the 1.3 billion outstanding, will be sold, with about three-quarters of that the result of its removal from the Composite. Bryan Chuah, an analyst for CIBC World Markets, puts the number at 195 million shares.
Meanwhile, Mr. Chuah says, an Encana addition to the S&P MidCap 400, CRSP U.S. and Russell 1000 indexes – which he expects will account for 90 per cent of Encana index demand – will occur later. “This creates a possible scenario whereby Encana's stock price could be under pressure initially from all the forced selling by Canadian indexers, which [would be] followed by incremental buying in the U.S. at a later date,” he wrote in a recent report.
Encana, at a market capitalization of about US$5-billion, is too small for the mainstay S&P 500, which requires US$8.2-billion of market value or more. (The index provider looks at “float,” adjusting market-value figures to strip out shares held by insiders.) That's the big prize: S&P Dow Jones Indices estimates US$3.4-trillion is indexed to the S&P 500.
Instead, Encana is a better fit, by size, for the S&P MidCap 400. While S&P Dow Jones Indices is adding Encana to 14 small U.S. indexes Friday, including several focused on the energy industry, it did not add it to the MidCap 400.
S&P spokesman Ray McConville declined to speculate on Encana's future index inclusion. For a company to be considered for inclusion in the S&P 500, S&P MidCap 400 or S&P SmallCap 600, Mr. McConville said, it must first be a constituent of the S&P Total Market Index. That will next be rebalanced in March, he said.
Tim Benedict, spokesman for the FTSE Russell group of indexes, said Encana will move to the FTSE USA Index and leave the FTSE Canada Index as of market close on March 20. The Russell U.S. indexes, which will be reconstituted this summer, use a different methodology, and he could not comment on whether Encana would be added.
Even in settling for the smaller U.S. indexes, though, Encana can win, Mr. Chuah of CIBC says. He believes U.S. index demand will cover the 195 million Canadian shares sold, plus another 120 million – bringing passive, index-fund ownership to 25 per cent of the company, from 15 per cent today.