Investor shift abroad drives $19.2B net outflow as equity demand surges
Canadian investors sharply increased their exposure to international markets in February, driving a significant net outflow of capital from the domestic economy, new data from Statistics Canada shows.
The report indicates that Canadians acquired $25.4 billion in foreign securities during the month, marking the highest level of investment abroad since March 2024. At the same time, foreign investors pulled back on Canadian assets, purchasing $6.2 billion worth of domestic securities following an exceptionally strong January.
The combination of these movements led to a net outflow of $19.2 billion in February, a reversal from the $35.4 billion inflow recorded in the previous month.
Equities drive Canadians
Equities were the primary force behind the outbound activity. Canadian investors bought a record $32.9 billion in foreign stocks, with US markets drawing the bulk of the inflows.
Large-cap US technology companies were a key destination for these investments. This demand persisted despite a modest decline in the S&P 500 during the month.
In contrast, Canadians reduced their holdings of foreign debt securities by $7.5 billion, including a record selloff of US federal government bonds.
Foreign investment into Canada weakened notably compared with January’s surge. While non-resident investors continued to purchase Canadian bonds—especially corporate and federal government issues—these inflows were offset by selling in equities and money market instruments.
Non-resident investors cut their exposure to Canadian equities by $9.2 billion, with declines seen across multiple sectors, particularly in energy and mining.
The latest figures point to a clear shift in investment behaviour, with Canadian investors increasingly seeking opportunities outside the country as foreign demand for domestic equities loses momentum.
