Canada's international transactions in securities, May 2025

Canadian investors acquired $13.4 billion of foreign securities in May, led by purchases of US shares. Meanwhile, foreign investors reduced their exposure to Canadian securities by $2.8 billion, marking a fourth consecutive monthly divestment.

As a result, international transactions in securities generated a net outflow of funds of $16.2 billion from the Canadian economy in May, a fourth consecutive month of net outflows, bringing the total to $83.9 billion.

Chart 1: Canada's international transactions in securities

Canadian investors acquire US shares

Canadian investors increased their exposure to foreign securities by $13.4 billion in May, an increase compared with the $4.1 billion investment in April. In May, investors targeted US shares, while reducing their exposure to US government debt instruments.

Canadian investors bought $11.5 billion of foreign shares in May, the largest investment since February. Sizable acquisitions of US shares (+$14.2 billion) in May were moderated by sales of non-US shares (-$2.8 billion). By the end of the month, US share prices, as measured by the Standard & Poor's (S&P) 500 composite index, had increased by 6.2% compared with the end of April, following three consecutive months of decline.

Investors purchased $1.9 billion of foreign debt securities in May, largely US corporate bonds (+$3.2 billion) and non-US bonds (+$2.8 billion). Meanwhile, investors reduced their holdings of US Treasury bills (-$2.8 billion) and US government bonds (-$1.3 billion) following two strong months of investment. US short- and long-term interest rates increased over the month.

Chart 2: Canadian investment in foreign bonds

Strong foreign divestment in Canadian shares

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 and money market instruments, while they acquired bonds.

In May, non-resident investors reduced their exposure to Canadian shares by $11.4 billion. On a sector basis, the divestment in May was widespread, led by shares from the energy and mining, management of companies and enterprises, as well as manufacturing sectors. By the end of the month, Canadian share prices, as measured by the S&P/Toronto Stock Exchange composite index, increased by 5.4% compared with the end of April, following three consecutive months of decline.

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

The foreign divestment in money market instruments totalled $4.5 billion in May and largely targeted government of Canada paper (-$4.0 billion).

At the same time, non-resident investors acquired $13.1 billion of Canadian bonds, following a $25.1 billion divestment in April. The activity in May reflected foreign acquisitions of provincial (+$8.0 billion) and federal (+$6.9 billion) government bonds, which were moderated by a divestment of $4.2 billion in private corporate bonds. Canadian long-term interest rates rose in the month.

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

Table 1: Canada's international transactions in securities