Canadians back in the market, study finds

(July 13, 2004) Canadian investors are back in the markets, returning to a record high percentage who own equities, according to the latest TSX Group Shareowners Study.

“We have a strong equity culture in Canada,” said Barbara Stymiest, CEO of the TSX Group. “Canadians are informed investors who provide a strong base for our capital markets. The information in this study confirms that Canadian investors gravitate toward high return, low cost financial products.”

Forty-nine per cent of Canadians currently own stock, either directly or through funds, a level of ownership previously only seen in 2000, near the end of the bull market. Direct participation in the markets has increased recently, while mutual fund ownership has not yet recovered to 2000 levels.

The study found also found that Canadian investors were not simply content to buy common equity, but that one in 10 have dipped into derivatives or income trusts.

“We measured exchange-traded funds (ETFs) and, for the first time ever, income trusts and derivatives,” said Renee Colyer-Andres, director of research services with TSX Group. “Surprisingly, we found ETFs had 7% and income trusts captured 9% of overall shareowner holdings.”

Of those investors who do hold equities, 57% own stocks directly, up from 51% in 2000. Mutual funds are still held by 81% of shareowners, down from 87% in 2000.

“These improvements have come despite a slow recovery in the high tech and telecom sectors and continued high profile scandals associated with accounting practices, insider trading and corporate governance,” says Colyer-Andres. “It is interesting that while shareholder levels have increased, investors do remain skeptical over the quality of corporate disclosure.”

The TSX Group study, conducted by DINE & Associates, surveyed 2,000 shareowners and an additional 500 non-shareowners between April 8 and May 18, 2004.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com