Canada's international transactions in securities, February 2025

Canadian investors acquired $27.2 billion of foreign securities in February, led by a record investment in US equity securities, which more than offset the significant divestment in these instruments in January. Meanwhile, foreign investors reduced their exposure to Canadian securities by $6.5 billion, led by the highest monthly divestment in the Canadian equity market since October 2007.

As a result, international transactions in securities generated a net outflow of funds of $33.6 billion from the Canadian economy in February. This follows two consecutive months of strong inflows of funds totalling $21.2 billion.

Chart 1: Canada's international transactions in securities

Source: Table 36-10-0028-01.

Unprecedented Canadian investment in US shares

Canadian investors increased their exposure to foreign securities by $27.2 billion in February, compared with a $3.0 billion divestment in January. The rebound in investment was essentially in US shares.

Chart 2: Canadian investment in foreign equity and investment fund shares

Source: Table 36-10-0028-01.

Canadian investors bought $27.9 billion of foreign equity securities in February, the largest investment since December 2023. In February, record acquisitions of $29.8 billion in US shares were slightly offset by sales of $2.0 billion in non-US shares. The investment in the US stock market followed a sizable divestment of $15.6 billion in January and focused on shares of large capitalization technology and financial firms. US share prices, as measured by the Standard and Poor's (S & P) 500 composite index, reached an all-time high in mid-February before retreating by the end of the month. For the month as a whole, the index was down by 1.4%.

Meanwhile, Canadian investors reduced their holdings of foreign debt securities by $0.7 billion in February. While investors increased their exposure to US government money market instruments and US corporate bonds, they decreased their holdings of US government bonds and non-US foreign debt instruments.

Strong foreign divestment in Canadian shares

Foreign investors reduced their holdings of Canadian securities by $6.5 billion in February, the first divestment in 12 months. Foreign investors sold Canadian equity securities, while they acquired debt instruments.

Chart 3: Foreign investment in Canadian equity and investment fund shares

Source: Table 36-10-0028-01.

Non-resident investors reduced their exposure to Canadian shares by $21.9 billion in February, the highest monthly divestment since October 2007. On an industry basis, the declines in February were widespread, led by shares from the management of companies and enterprises, manufacturing as well as energy and mining industries. Canadian share prices, as measured by the S & P/Toronto Stock Exchange composite index, decreased slightly in February.

At the same time, non-resident investors increased their exposure to Canadian bonds by $9.9 billion in February, down from a significant investment of $33.5 billion in the previous month. They also increased their exposure to Canadian money market instruments by $5.6 billion, following a large divestment in January.

Chart 4: Foreign investment in Canadian bonds, by sector of issuer

Source: Table 36-10-0028-01.

The activity in the Canadian bond market in February reflected foreign acquisitions of $19.2 billion of corporate bonds, which were moderated by divestments of $6.4 billion in federal government bonds and $2.9 billion in provincial government bonds.

The foreign investment in Canadian money market instruments in February targeted private corporate paper (+$7.3 billion) and provincial governments paper (+$1.9 billion).

In February, the Bank of Canada held its policy rate at 3.0%, and the Canadian dollar appreciated by 0.3% against the US dollar.

Table 1: Canada's international transactions in securities