Canadian investors piled into U.S. stocks in June while foreign investors curbed their buying of Canadian securities, according to Statistics Canada.
The national agency reported that investors added $16.4 billion worth of foreign securities in the month, driven by a $12.5-billion investment in U.S. equities — particularly large-cap tech stocks.
Domestic investors also added $2.4 billion in U.S. corporate debt and $2.4 billion worth of foreign money-market instruments.
“The investment in foreign paper reached the largest level since May 2017 and was mainly in instruments denominated in U.S. dollars and Japanese yen,” the agency reported.
StatCan said Canadian pension funds led the offshore buying activity.
Foreign interest in Canadian securities slowed in June after a couple months of strong buying activity. Foreign investors added just $5.2 billion in Canadian securities in the month as they continued buying bonds, but sold Canadian equities.
Specifically, foreign investors added $10.6 billion of Canadian debt, primarily corporate bonds ($10.4 billion) and federal government debt securities.
“Overall, foreign investment in Canadian debt securities amounted to $75.7 billion in the second quarter of 2024, the largest amount since the second quarter of 2020, at the onset of the Covid-19 pandemic,” StatCan said.
Investors also shed $5.5 billion worth of Canadian equities in June, down from a $9.5 billion divestment in May.
With foreign investment declining and increased buying of foreign securities by Canadian investors, the economy recorded a net outflow of funds of $11.2 billion from cross-border securities transactions in June.
StatsCan noted that the outflows in June followed monthly inflows in April and May that totalled $57.8 billion.
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