Investors add foreign equities in August: StatsCan

Canadian investors jumped into foreign equities in August, while offshore investors trimmed their holdings of Canadian securities, according to new data from Statistics Canada.

The national statistical agency reported that Canadian investors added $14.9 billion worth of foreign securities to their portfolios in August, led by $10.6 billion in foreign equities: $6.7 billion in U.S. stocks and $3.9 billion of other foreign equities.

StatsCan said investors focused their foreign equity buying on U.S. large-cap tech along with Asian and European markets.

This buying activity came in the face of declines in major world equity markets in August, it noted.

As interest rates climbed, Canadian investors also added $3.7 billion worth of U.S. bonds during the month, primarily government debt.

At the same time, StatsCan reported that foreign investors reduced their Canadian securities exposure by $8.5 billion in August — led by a $5.8-billion selloff in equities.

“The divestment in August was widespread across all industries except for the banking industry and the trade and transportation industry,” it said.

Through the first eight months of the year, offshore investors have now dumped $40.5 billion worth of Canadian equities, compared with $3.5 billion over the same period last year.

Additionally, foreign investors trimmed their Canadian debt holdings by $2.7 billion in August, StatsCan reported.

This activity was driven by $6.7 billion of federal government bond retirements, partially offset by a $4.3-billion investment in federal government Treasury bills.

Overall, the buying activity by Canadian investors and the selling by offshore investors generated a net outflow of $23.4 billion from the Canadian economy in August, StatsCan said.