Canadian Portfolio Investment Survey

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Canadian investors held $585.6 billion in foreign securities at the end of 2008, a 23.4% decrease in the market value of these assets compared with 2007. The decline was focussed in equities and widespread geographically.

This marked the first annual decrease in Canadian holdings of foreign securities since 2002. The turmoil in global markets, which began in 2007 and intensified in 2008, resulted in substantial sales of foreign securities and also generated capital losses for Canadian investors. These declines were moderated by increases from the revaluation effect on these foreign currency-denominated assets, as a result of the depreciation of the Canadian dollar against other major currencies.

Canadian investors held $438.9 billion in foreign stocks and $146.7 billion in debt securities in their portfolios at the end of 2008. Holdings of foreign stocks were down 27.2% in 2008 as major global stock markets decreased substantially, especially in the last quarter of the year. As a result, the share of investment in foreign stocks in Canadians' portfolios continued to decline, reaching 75% at the end of 2008.

The reduction in holdings of foreign debt instruments (-8.9%) was more moderate, despite significant sales over the course of the year. Lower holdings of foreign debt instruments in various countries reflected the performance of non-US securities, mainly those issued by financial corporations.

The value of securities held by Canadians in European countries decreased 33.9%. Holdings of securities in Asia and Oceania fell by 27.2%, with the strong depreciation of the Canadian dollar against the Japanese yen attenuating the drop in holdings of securities in this region.

Canadian investment in stocks of Brazil, Russia, India and China at the end of 2008 declined 38.5% to $10.5 billion, as commodity prices fell. This offset substantial gains recorded in these countries in 2007.

Canadian holdings of US securities decreased 15.1% in 2008 to $321.9 billion, one of the smallest declines among the major investment countries. Holdings of US securities still represented the bulk of Canadian portfolio investment abroad in 2008 as it accounted for 55% of total holdings of foreign securities.

Canadian portfolio investment abroad was spread in over 90 countries at the end of 2008. The top 5 countries for portfolio investment were still the United States, the United Kingdom, Japan, France and Germany. The share of investment in these countries accounted for 77% of investment holdings in 2008, compared with 73% in 2007, mostly reflecting a higher share in US securities holdings during a period characterized by turbulence in world financial markets.

Note: This survey collects information on portfolio investment assets at year-end, at market value, broken down by country of issuer. This is an annual survey used to generate a detailed geographical breakdown and serves to benchmark the balance of payments and international investment position. Portfolio investment is defined as investment in foreign securities undertaken for the sake of investment income or capital gains. Foreign securities are defined as an investment in equity and debt instruments issued by a non-resident issuer.

Available on CANSIM: table 376-0064.

Definitions, data sources and methods: survey number 1537.

For more information, or to order data, contact Client Services (613-951-1855; infobalance@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Francis Salifu (613-951-2428; francis.salifu@statcan.gc.ca) or Éric Boulay (613-951-1872; eric.boulay@statcan.gc.ca), Balance of Payments Division.