Bonds lure cross-border investors in April: StatsCan

Even as equity markets were setting records, it was bond buying that drove cross-border investment activity in April, according to new data from Statistics Canada.

The national statistical agency reported that Canadian investors bought $18.6-billion worth of securities in April, led by $9.7 billion in bond purchases, outpacing $8.5 billion in equity buying.

At the same time, foreign investors bought $10-billion worth of Canadian securities, resulting in a net portfolio outflow of $8.7 billion during the month.

Over the past 12 months, Canadian investors have added $140.9 billion in foreign securities, StatsCan said.

In April, investors added record amounts of U.S. corporate bonds, buying $5-billion worth.

Canadian investors also added $2 billion in U.S. government bonds and $2.8 billion in other (non-U.S.) foreign bonds, mainly government bonds.

Alongside the bond buying, Canadian investors acquired $8.5 billion of foreign stocks in April — led by $5.4 billion that went into U.S. stocks, mainly large-cap tech stocks, StatsCan reported.

Meanwhile, foreign investors targeted Canadian government bonds in April, as they added $5.5-billion worth of Canadian bonds during the month.

Foreign investment in federal government bonds amounted to $8.4 billion, StatsCan reported, noting that this marked the largest investment in a year.

Offshore investors also purchased $3.9 billion in provincial government bonds, and sold $5.8-billion worth of corporate bonds in the month.

Cross-border equity investment slumped to $2.8 billion in April, which was down sharply from the average monthly total over the five previous months of $7.5 billion.

This drop came despite the S&P/TSX composite index also hitting new highs in April, gaining 2.2% in the month.

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.