Canadian investors’ holdings of foreign equities declined for the first time in 10 years in 2018, according to new data from Statistics Canada.

StatsCan reported that overall holdings of foreign securities rose by $52.0 billion in 2018 to $2.2 trillion, but that equity holdings declined by 2.1% to $1.6 trillion — the first decline in a decade.

The drop in foreign equities was primarily due to stock market weakness, the report indicated.

For instance, the S&P 500 was down by 6.8% during the year. This decline was moderated by weakness in the Canadian dollar, which also dropped by 8.7% against the U.S. dollar during the year.

In 2017, foreign equity exposure increased by 23.0%, StatsCan noted.

But last year, it was foreign debt driving the increase in foreign investment. Canadian investors’ foreign debt holdings increased by 18.9% during the year to $544.2 billion.

StatsCan said that $50.4 billion in acquisitions accounted for the largest share of the increase.

“Such investment activity had not been seen since 2006, a year marked by the rise of the maple bond market,” it noted.

The overall increase in foreign securities holdings in 2018 reflects an ongoing trend of the past 10 years.

“Canadians are strongly exposed to global financial markets,” StatsCan said. “This form of international investment has grown rapidly in recent years, doubling its share of total financial assets of Canadian investors in the last decade.”

The U.S. remains the top foreign target for Canadian investors, accounting for over 60% of foreign holdings, StatsCan noted. The U.K. is a distant second at 5%, followed by Japan at 4% and France (2%).

While Canadian investors increased their U.S. holdings by about 4.9% in 2018, their exposure to most other major economies declined during the year; again, primarily due to lower equity markets.