Canadian share ownership, either direct or indirect through stock-based funds, has bounced back to record levels despite ongoing market scandals and the slow recovery of the technology and telecom sectors.

The TSX Group Inc. said Tuesday its most recent shareowners study indicates share ownership in Canada was now at 49%, equaling the previous record set in 2000 at the end of the bull market run of the late 1990s.

But the study noted that direct stock ownership continues to increase while the ownership in mutual funds has not returned to 2000 levels. In 2004, 57% of shareowners held stocks, an increase from 54% in 2002 and 51% in 2000. For mutual funds, the current number is 81% of total shareowners, down from 87% in 2000.

“The recovery of share ownership in Canada is remarkable,” said Renee Colyer-Andres, director of research services with TSX Group. “Investors have seen a gradual stock market recovery after one of the most dramatic downturns in history fuelled by 9/11 and the war in Iraq. 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.”

The study shows shareowners are also diversifying and trying new investment vehicles: one in 10 shareowners now owns derivatives while about the same number has invested in income trusts.

Colyer-Andres said the study also shows that shareholder levels have increased, but “investors do remain skeptical over the quality of corporate disclosure.”

The study also found a shift in the type of investment vehicles used by Canadian investors. Exchange-traded funds have captured 7% of overall shareowner holdings, while income trusts and derivatives, measured for the first time, accounted for 9% of holdings. The TSX Group suggested the shift has come largely at the expense of mutual funds whose proportion of shareowner holdings has dropped to 56% in 2004 from 64% in 2002 despite increases in the number of funds held.

The TSX Group surveyed 2,000 shareowners and an additional 500 non-shareowners between April 8 and May 18.

The study is available for purchase at: researchservices@tsx.com.