Canadian portfolio investment abroad, 2014
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Released: 2015-07-10
The value of foreign securities held by Canadian investors continued to advance at a strong pace in 2014. Canadian portfolio investment abroad was up by 20% to $1,375.6 billion at the end of 2014, a sixth straight year of increase after the global financial crisis of 2008.
The growth in most major global stock markets and the upward revaluation effect of a depreciating Canadian dollar against the US dollar, combined with acquisitions of foreign securities, all contributed to the increase in these assets in 2014.
Holdings of foreign equities and debt securities both posted strong growth in 2014 at 20% and 22% respectively. Canadian holdings of foreign equities stood at $1,092.6 billion, accounting for 79% of total holdings at the end of 2014. This percentage has been relatively stable over the last decade but was lower than the share of 91% observed in 1999 and 2000.
The composition of portfolio investment abroad in favour of equities was also a pattern observed in the United States, but stood in contrast to most other major investing countries. European countries such as United Kingdom, Germany and France, as well as Japan, have a higher share of their portfolio assets held in the form of debt securities.
Chart 1
Canadian holdings of foreign securities
Holdings of US securities remain strong
Canadian portfolio investment abroad was spread over more than 100 countries at the end of 2014. The top five investment destinations were the United States, by a wide margin, the United Kingdom, Japan, Germany and France.
Canadian holdings of US securities were up 24% in 2014 to reach $833.3 billion. The increase was led by gains in US stock prices and the impact of the depreciating Canadian dollar against the US dollar. Canadian investors had 61% of their portfolio invested in US securities at the end of 2014, compared with a share of 50% in 2007 just prior to the financial crisis.
Holdings of European securities by Canadian investors were up 11% to reach $297.7 billion in 2014, following a 35% increase in 2013. Portfolio assets in all major countries in Europe advanced in 2014, notably Germany and United Kingdom, while growth in France was more modest. Acquisitions of European securities on the secondary market, moderated by the downward revaluation effect of an appreciating Canadian dollar over the Euro, explained most of the changes in 2014.
Holdings of securities in Asia and Oceania were up 20% in 2014. For a second consecutive year, the value of Chinese securities held by Canadian investors posted growth exceeding 50% to reach $21.3 billion, led by capital gains. Canadian portfolio assets in China surpassed those in South Korea for the first time since the inception of the survey in 1997. Nonetheless, holdings of Japanese securities still dominate the investment in this region, rising 18% to $57.5 billion at the end of 2014.
Chart 2
Canadian holdings of foreign securities, by major geographic area
Note to readers
Canadian portfolio investment abroad is based on an annual survey of Canadian investors of securities that is used, along with other sources, to generate a detailed geographical breakdown for holdings of foreign securities.
Foreign securities cover equity and debt instruments issued by non-residents. Securities denominated in foreign currency are converted to Canadian dollars at year end. The survey collects information on Canadian holdings of foreign securities at year-end, at market value and broken down by country of issuer. In this context, portfolio investment can be seen as investment undertaken primarily for the sake of investment income or capital gains. This investment excludes cross-border direct investment and reserve assets, which are other components of the international accounts.
Beginning with the third quarter of 2015, these detailed estimates will be available on a quarterly basis rather than on an annual basis. These estimates will also be integrated in the International investment position release of December 2015, in line with the Canadian System of Macroeconomic Accounts revision policy.
Contact information
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca).
To enquire about the concepts, methods or data quality of this release, contact Francis Salifu (613-797-0651; francis.salifu@statcan.gc.ca), International Accounts and Trade Division.
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