Canadian investors keep buying U.S. shares

In May, Canadian investors increased their exposure to foreign securities by $13.4 billion, up from April when they made net purchases of $4.1 billion, according to data Statistics Canada released Thursday.

U.S. shares accounted for the bulk of that, with Canadians buying $14.2 billion of U.S. shares in May and selling $2.8 billion of non-U.S. shares. Investors also bought $3.2 billion of U.S. corporate bonds while divesting from $2.8 billion of U.S. T-bills and $1.3 billion of U.S. government bonds.

Foreign investors reduced their holdings of Canadian securities by $2.8 billion in May, a fourth consecutive monthly divestment.

Foreign investors reduced their exposure to Canadian shares by $11.4 billion, led by shares from the energy and mining, management of companies and enterprises and manufacturing sectors. They also acquired $13.1 billion of Canadian bonds, following a $25.1-billion divestment in April.

At the same time, foreign divestment from Canadian money market instruments totalled $4.5 billion in May and largely targeted government of Canada paper (-$4 billion). Foreign acquisitions of provincial ($8 billion) and federal ($6.9 billion) government bonds were moderated by a divestment of private corporate bonds (-$4.2 billion).

As a result, international transactions in securities generated a net outflow of $16.2 billion from the Canadian economy in May, a fourth consecutive month of net outflows.

Jonathan Got

Jonathan Got is a reporter with Advisor.ca and its sister publication, Investment Executive. Reach him at jonathan@newcom.ca.