The rally in miners and energy stocks this year has propelled Canada’s stock market to a record high as investors piled into producers of crude oil and gold amid rising geopolitical tensions. 

The S&P/TSX Composite Index gained 1.4 per cent Thursday to close at a record high, its first since Nov. 12 with traders on the hunt for havens as the ongoing war in Ukraine fueled market jitters. 

Shares of energy and materials companies have been strong this year, making them the two best-performing groups in Canada as markets reel from a tight oil market, economic growth uncertainty and a rising interest-rate environment.

“It’s concentrated in financials, energy and commodities, and that’s the place to be in this kind of market with rising rates and inflation and the potential for war escalation,” Barry Schwartz, chief investment officer at Baskin Wealth Management said by phone.

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With oil and gas firms and miners making up almost a third of the benchmark, Canadian stocks have outperformed their U.S. counterparts -- the S&P/TSX Composite has gained 2.6 per cent this year, while the S&P 500 Index slumped over 7 per cent. Bank stocks, which contribute about 33 per cent to the index, have also advanced this year as the Bank of Canada and the Federal Reserve raised interest rates and signaled that more hikes are to come.

U.S. stocks have outperformed Canada every year since 2011 except one (2016), leading to a very wide long-term performance gap. But this could be the year things turn around for the TSX. With growth stocks getting hammered this year, investors may look at diversifying their portfolio by adding Canada’s “tech-lite” US$3 trillion stock market.

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“Canada provides a home for stability,” Brian Belski, chief investment strategist at BMO Capital Markets said in an interview. “Equities can go up in lockstep with higher rates. The markets are doing what they’re doing because the Fed came out yesterday and gave them a plan. And the markets applauded that.”