Canadian investors directed a record $59.9 billion CAD into U.S. debt and equities from January to May, marking the strongest year-to-date inflow since at least 1990. Net foreign investment in Canadian securities fell by $18 billion CAD over the same period. U.S. markets have outperformed benchmarks despite concerns about tariffs, labor market cooling, and an AI bubble, while Canadian stocks have shown relative outperformance due partly to lower starting valuations. Portfolio diversification and the large scale of U.S. markets continue to drive Canadian allocations to American securities despite some domestic 'Buy Canadian' sentiment.
Canada's ire toward the U.S. in the wake of soured trade relations has rocked summer tourism and spurred consumer boycotts, but that wrath has not extended to U.S. markets. Canadian investors have poured $59.9 billion Canadian dollars ($43.3 billion USD) into net purchases of U.S. debt and equities from January to May this year alone, according to data from the National Bank of Canada Financial Markets, the most in this year-to-date period since at least 1990.
The Canadian flocking to American stocks comes as U.S. markets continue to outperform the benchmark, despite widespread concerns about tariff-induced inflation, a cooling labor market, and an AI bubble. Ironically, Canadian stocks are actually outperforming their American counterparts, according to Morningstar data, possibly a result of Canadian company valuation bases starting the year much lower than those in the U.S.
'Buy Canadian' programs seemingly don't apply to investment portfolios, as Canadian investors have instead loaded up on U.S.-issued securities at an entirely unprecedented year-to-date pace," Warren Lovely, managing director of National Bank Financial, wrote in a report last month. "Meanwhile, foreign investors have cooled on Canada."
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