Canadian investors pile into foreign equities

Canadian investors snapped up large quantities of foreign equities as part of unprecedented investment in global securities in March, according to Statistics Canada.

The national statistical agency reported that investors added a record $35.6 billion worth of foreign securities to their portfolios in March, pushing the first quarter total to its own record of $51.5 billion.

The monthly record total was driven by investors buying $23.2 billion of foreign equities, including $18.9 billion worth of U.S. equities — primarily large-cap tech stocks.

Additionally, investors added $4.6 billion worth of U.S. government and corporate bonds, and $8.2 billion in non-U.S. foreign bonds, largely government bonds.

Canadian investors have invested almost $130 billion in foreign securities over the latest 12 months, National Bank Financial Inc. said: “High-yielding U.S. Treasuries, other foreign bonds, and ample American stocks have been scooped up.”

At the same time, foreign investors bought $14.4 billion of Canadian securities in March, more than reversing a $4.3-billion divestment in February, StatsCan said.

The foreign buying all came in Canadian debt securities in March, as investors added $17.9 billion worth of these instruments — including $6.7 billion in federal debt, $4.0 billion of provincial debt and $6.9 billion of corporate bonds.

Partially offsetting the acquisition of Canadian debt, foreign investors also sold off $3.5 billion worth of Canadian equities in March.

The selling activity came primarily in the banking sector, followed by the trade and transportation industry, StatsCan reported.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.