Pension and benefit investors pivot toward home-market bonds and equities
Foreign investors sent a clear signal in October: Canada is back in favour.
Net inflows into Canadian securities hit $58.2bn, the strongest since March 2022, according to Statistics Canada.
Foreign investors bought $46.6bn of Canadian securities in October, led by $38.6bn in bonds and $12.6bn in equities.
Within fixed income, non-residents focused on private corporate bonds (+$17.8bn), largely new US dollar issues, and federal government bonds (+$16.2bn), while trimming $4.6bn in Canadian money market instruments, mainly private corporate paper.
The shift came as the Bank of Canada cut its policy rate by 0.25 percentage points to 2.25 percent in October.
Equity flows also tilted toward Canada.
Foreign investors increased their holdings of Canadian shares by $12.6bn, the highest since September 2024, with buying concentrated in energy and mining (+$7.4bn) and finance and insurance (+$4.0bn).
By the end of October, the S&P/TSX composite index was up 0.8 percent from the end of September.
On the other side of the ledger, Canadian investors reduced their exposure to foreign securities by $11.6bn in October, the first net divestment since January 2025 and the largest since January 2023, Statistics Canada said.
The pullback followed eight straight months of net buying totalling $118.3bn and centred on US assets: Canadians sold $6.1bn in foreign shares (including $6.6bn in US equities, partly offset by $0.4bn in non-US shares) and recorded a $5.4bn net divestment in foreign debt, mainly US government bonds (-$6.9bn) alongside a modest $0.6bn increase in US government paper holdings.
Further down the market-cap spectrum, trading in Canadian Securities Exchange (CSE) names remained active, with 1.3bn shares trading and $507m in value in November, while CSE issuers completed 101 financings raising $172m, according to a TMX press release.
The CSE noted continued investor interest supported by near-record gold prices and highlighted four new listings in mining, sustainability-focused crypto, data-capture technology and biotech.
